Replies to post #40794 on lowtrade

[BigBake1]

I had to look at it several times because there was something not adding up, to be Threshold certain parameters must be met for a reporting security:

Regulation SHO defines threshold securities as any equity security of an issuer that is registered under Section 12, or that is required to file reports pursuant to Section 15(d) and where, for five consecutive settlement days:

there are aggregate fails to deliver at a registered clearing agency of 10,000 shares or more per security; AND

the level of fails is equal to at least one-half of one percent of the issuer's total shares outstanding

When I pulled up the last reported share structure I got:

13,191,342 a/o Feb 12, 2014

If you take one half of one percent that is about 66,000 shares in a failed position will cause a Threshold, what is odd it is the following FTD data reported:

 20140124	538144304	LIVE	92481	LIVEDEAL, INC. COMMON STOCK	17.00 
 20140127	538144304	LIVE	57144	LIVEDEAL, INC. COMMON STOCK	21.18 
 20140128	538144304	LIVE	15249	LIVEDEAL, INC. COMMON STOCK	23.52 
 20140129	538144304	LIVE	129160	LIVEDEAL, INC. COMMON STOCK	16.10 
 20140130	538144304	LIVE	107563	LIVEDEAL, INC. COMMON STOCK	17.04 
 20140131	538144304	LIVE	50775	LIVEDEAL, INC. COMMON STOCK	18.59

I am pretty certain the stock has not seen $17 - $23.52 share prices to date, the recent split is not properly reflected in the FTD data. In this case threshold is not determined by aggregate price of fails just number of shares, threshold started to occur on January 24th, 2014.

What is interesting is that Threshold is not an event caused by a specific cause when you look at just the FTD data on it's own, you have to look for other causes and eliminate them one by one. This statement from the SEC concerning FTD says it all:

Please note that fails-to-deliver can occur for a number of reasons on both long and short sales. Therefore, fails-to-deliver are not necessarily the result of short selling, and are not evidence of abusive short selling or “naked” short selling. For more information on short selling and fails-to-deliver, see http://www.sec.gov/spotlight/keyregshoissues.htm, http://www.sec.gov/divisions/marketreg/mrfaqregsho1204.htm, and http://www.sec.gov/rules/final/34-50103.htm.

In this case I went to look for Form 4's or Share Registrations. Well they filed an S-3 for 600,000 shares recently:

http://www.sec.gov/Archives/edgar/data/1045742/000101968714000558/livedeal_s3.htm

Also a little something to be aware of, they raised the share structure on the 28th of January:

http://www.sec.gov/Archives/edgar/data/1045742/000101968714000556/live_10q-ex0301.htm

So what is really happening? Someone is selling their currently restricted shares into the market awaiting the restricted legend to be removed. They are allowed to do this under SEC Rule 203:

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.

They have 35 days to deliver the shares to the broker with restricted legend removed. That S-3 was filed on the 14th of February, that is the effective date of registration for those shares. Take note they filed an amended 10K on January 28th, 2014. the 10K is important because it is used for the quick approval of the registration for shares.

There isn't a short squeeze coming, someone has sold shares in advance of a registration becoming effective for those 600,000 shares that become free trading as of that registration date. This will drop off Threshold for two reasons, the delivery of those newly "minted" shares and of course the expansion of the share structure as filed with the State of Nevada changes the threshold parameters. The chart looks nice, but the story from that promotional website Buyins.net doesn't match the reality.