First, it looks like there are far more shares in circulation than were ever registered and issued for sale by the company. But it would be hard to know with certainty about that because we don't know about the share volume turnover. For example, if the total volume is some 2.8 billion shares, that's four times the company's stated outstanding share count or a turnover that's 4 times the outstanding shares. But there could be more shares in circulation than 722 million. So without an official and accurate share count...who can know with any certainty.
But look at AAPL: it has just over 900 million shares out but trades average daily volume of over 28.5 million. That works out to a total volume of about 7.4 billion. That is a turnover that's well over 7 times the outstanding share total. I'm fairly confident in AAPL's stated outstanding share total. I've no idea exactly how many shares of spng are now in circulation.
Second this is somewhat difficult to address since we don't have access to the Order Audit Trail System, aka OATS, which tracks all the transactions. Without an audit of all the trades in spng, it would be difficult to evaluate these totals.
No doubt it is curious the firms pulling out around the time of the SEC investigation and halt of trading...
And even with the OATS data, firms often fudge the data, sometimes by mistake but often intentionally to hide certain types of transactions. Quite often it's the short sales that are not marked as such, being marked as long, or a sale, but not "Short Sale." Take Knight Equity Markets and Knight Capital Markets...See FINRA's Disciplinary Action Report for March 2010...
The link may not work but scroll to pages 7-8 to Knight...
"the firm consented to the described sanctions and to the entry of findings that it failed to report to the NMC the correct symbol indicating that transactions in reportable securities were short sales. The findings stated the firm executed short sale orders and failed to properly mark them as short..."
Now assuming there are far more shares in circulation than were legally registered and issued by the company, I can only say it would take a forensic accounting of all the trades, working backward perhaps 1-3 years, to know exactly how the extra shares found their way into circulation. Maybe they were distributed by RME with the help of a broker or two (maybe 3?), so it would take the forensic audit of all those transactions to find out exactly when, where, how and why they sold unregistered shares, distributing them into the public markets...
Then maybe it wasn't RME as some allege, but instead some of these Market Makers selling shares they never owned, borrowed or intended to borrow for delivery and settlement. We just don't know for sure but we can tell from FINRA's daily file of REG SHO short sales that spng has been one of the most steadily and heavily shorted stocks according to FINRA and REG SHO. Now exactly how many of those shares were actually delivered for settlement vs those unfortunately never delivered but left as a Failed to Deliver position? Without that count - maybe from the DTCC?
It will be interesting to see what shows up on the 23rd when the list of "equity security holders" is filed, hopefully it will be fully disclosed in BR court.
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