Replies to post #43830 on DD Support Board and Research Team

[BigBake1]

Interesting, but FTDs are not necessarily caused by NSS but in fact can also be caused by restricted shares sold into the market that have yet to have the restricted legend removed. It will be interesting to see what happens because the real issue appears to be an actual sizeable Short Position taken against the stock and not the NSS being claimed. Current short interest is in fact 1,088,353 shares, that is the real cause of the current move up.

SEC Rule 203 permits the sale of restricted shares into the market as long as the broker can confirm the TA is in fact removing the restricted legend at some point and has up to 35 days to deliver.

Rule 203(b)(2)(ii) provides an exception from the uniform locate requirement for situations in which a broker-dealer effects a sale on behalf of a customer that is deemed to “own” the security although, through no fault of the customer or the broker-dealer, it is not reasonably expected that the security will be in the physical possession or control of the broker-dealer by the settlement date. Footnote 71 of the Adopting Release states that one such situation is where a customer owns stock that was formerly restricted, but presently may be sold pursuant to the provisions of Rule 144 under the Securities Act of 1933 (17 CFR 230.144). Rule 144 securities may not be capable of being delivered on settlement date due to processing to remove the restricted legend. In such situation, delivery should be made on the sale as soon as all restrictions on delivery have been removed, and in any event within 35 days after trade date. If delivery is not made within 35 days after the trade date, the broker-dealer that sold on behalf of the person must either borrow securities or close out the open position by purchasing securities of like kind and quantity

It appears to me someone is taking advantage of the recent Squeeze on an actual short position and dumping their shares that have yet to be cleared by the TA.

[janice shell]

It'll be interesting to see whether FINRA approves that split quickly, or at all.