I'll make it as easy as I can Lets say a compan
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Lets say a company only has 10,000 shares in the float. That means that 10,000 shares can be legally shorted. You own 300 long shares and others own some or even all the rest of the 10,000.
Today the price of the shares is $1.00.
The shorter goes to the broker and says I want to short 4000 shares.
An short account is opened and a fee for shorting is charged. There is no voting. There is no counting. When the share price goes down shorty buys the shares at market and pays them back.
If the price goes up he gets a margin call or has to cover.
If the share price does not go down he hires pigs like Keymeyer to bad mouth the stock and make it do down.
If it still does not go down he sells more short at a lower number to make it go down.
People do not buy shares of stock that is going down.
On thing has them by the short hairs.
PEOPLE WHO OWN TELVUE ONLY BUY
THEY DO NOT SELL
Telvue Corp (TEVE) Stock Research Links
There is no limit to the loss of someone has been caught in a short squeeze.