I know how busy you must be but I promise if you
Post# of 5282
I know how busy you must be but I promise if you read this one email you will know how it is done.
What must first be understood is the fact that years ago one could establish a short position simply by going to the right broker by telling the broker how many shares you wished to short and at what price . Once the position was established by the shorter the game began. If the company made money and the price of the stock went up it would be necessary for the shorter to receive a margin call and put more in the pot to cover any possible scenario . If the shorter did not meet the call he lost the money he put up and the game ended. If the company lost money from the beginning the shorter added to his short position as they went along. In most cases the shorter tried to find a company it felt would fail and as time went on if the company started to do well it was easy for the shorter to hire basher crews to help the company lose and it is a simple matter to sell small lots of stock at a lower and lower price to drive the price down so people will not buy it.
PEOPLE DO NOT BUY A STOCK THAT IS GOING DOWN. PEOPLE BUY A STOCK THAT IS GOING UP AND RUN TO TELL THEIR FRIENDS.
In TelVue’s case it was the perfect short target in the beginning because they had the worst business plan in the history of man. That’s not the case since Princeton Server Group took over. TelVue will win.
Everyone knows if the company steps up big and starts to win and comes out of the dark to produce a profit then shorty is in trouble. They also know if the company produces a dividend then shorty is in deep shit. But let’s say that does not happen. How can shareholders win without the company winning and only because of the fact that there are shorts. Well it’s not easy but it can be done. Let’s look at TelVue as we know it. After you have done the math on that you can put any company into your formula and see if you can win.
We know Gerry Lenfest owns 600,000 shares and we know that leaves 55,000 shares for the rest of us. Gerry isn't going to sell any. Many think if you hold those 55,000 shares you win. That is not true. You must hold the 55,000 shares plus all the possible shorts which is 655,000 shares. If you tried to buy and hold 655,000 shares at an average price of $10.00 it would cost 6 million and change. Not a very likely scenario . However if the average price were $1.00 if would be doable . $655,000 dollars. If the average price were even lower it would be easier. Of course if you had a company with a float of 6 million or 10 million shares it would be impossible.
Remembering that at any time the company can step up and show a profit and make so much money for longs they can not count it all it becomes worth a gamble if you have a chance to begin with.
Buying lots of TelVue no matter what size is a cut in the body of shorty.
A death of 1000 cuts takes care of this sucker.
Telvue Corp (TEVE) Stock Research Links
There is no limit to the loss of someone has been caught in a short squeeze.