Replies to post #12874 on Rock Creek Pharmaceuticals Inc (fka RCPIQ)

[abew4me]

That's an interesting thought.

I wonder just how many shares have been traded since we started our upward trend a few weeks ago?

Even more curious is who has been buying all these shorted shares?

[NukeJohn]

I have been thinking something similar.

Could it be with all of the regulatory pressure on the SAC Capitals of the world, that the naked short players have been told by their brokers to either deliver STSI shares or cover their short positions BECAUSE THE BROKERS ARE NOT GOING TO LET THEM KEEP ROLLING THEIR NAKED SHORT POSITIONS?

Just a thought.

If there is a large naked short interest in STSI, perhaps the investment banks may not be willing to float additional short shares (with the SEC prowling around). This could force those that are shorting to find real shares to short (hence all the requests for loaning shares we have seen posted).

If you haven't read this article about Patrick Byrne and SAC Capital, it is worth a read. In this article, Byrne claims that at one time, over six times the float of his company was naked short.

This article is definitely worth a couple of minutes of your time...

http://www.sfgate.com/technology/businessinsider/article/OVERSTOCK-COM-CEO-Steve-Cohen-Is-Directly-4691873.php

excerpts...

"Eight years ago I was roundly criticized by coming out publicly and saying, in brief: A network of dirty hedge funds were practicing all kinds of dicey practices, including insider trading and naked short selling (and being serial killers of firms in the process)," Byrne wrote. "The SEC was not doing its job protecting our markets because it is a captured regulator, and this combination was destabilizing the system."

He continued: "Also that the mastermind, the Napoleon of crime, so to speak, was someone I initially identified as the "Sith Lord" of all that was evil and wrong on Wall Street. In the months after, I gradually dropped broader and broader public hints that I was talking about Stevie Cohen. Of course, through all of this my claims were spun, ridiculed, and mocked."

If the documents leaked by bank lawyers are any indication, Overstock was not only being ridiculed by the media, but also by insiders at Wall Street banks. Naked short selling (or "failing" a stock) is the practice of shorting a stock that has never actually been borrowed. It's illegal, in part, because it creates fake supply of a stock, and in 2005 and 2006 Overstock.com claims naked short-selling created six times the actual supply of its stock in the market.

Someone might choose to naked short sell a stock when the stock is a negative rebate stock — too expensive to borrow. That's why it sounded so damning when the emails leaked from banks said things like this:

"We are NOT borrowing negatives... I have made that clear from the beginning. Why would we want to borrow them? We want to fail them," said one Merrill exec.

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I wish there was a way to determine the naked short interest in STSI, but I don't think it is possible. IMHO, the stock was heavily shorted after each tobacco litigation loss in the MD District Court, and I don't think those shorts have ever had a chance to completely cover their position. We know that is the case for the shares that are legitimately shorted, because that total is 33.5 million shares (as of the last report).

If the stock breaks 2.15, IMHO, it is off to the races.

JMHO,

NJ