Pink Board Shorts

There are many ongoing violence in the OTC Bulletin Board and much money is in the result. Regulators seek to resolve the problem but are unable to put an end to it, unless they take drastic measures that will be detrimental to small and micro-market of the CAP.

The market for small and micro-CAP is essential to place small and medium enterprises through mergers and reverse Regulation D (504) provides, these are the two most popular methods used by small and medium enterprises size make it public.

These two avenues are prefer small and midsize businesses because they simple and less expensive than the traditional IPO, it may refer to a simplified accelerated method by which a private company can become a public company.

I described the process in detail how small and medium enterprises can make public in previous articles, if you miss, you can email me and I will be happy to explain.

I have over 25 years experience in the securities industry as a market maker and trader. In my own brokerage firm and with a couple of the largest wholesalers of Wall Street. I believe my experience qualify me to write on the subject with clarity and honesty of an eye for the birds.

I believe that short selling as a legitimate means of providing liquidity to the market as a market maker essential thing is not what I am talking about.

A short position is established when someone sells a stock they do not have the hope of buying the tank at a later date at a lower price.

There are several reasons for selling shares of companies that have gone public through a reverse merger is profitable and easy, I will identify and suggest ways that this can be stopped once for all all without affecting the legitimate short seller who is willing to sell and support the risks associated with operating a short position. Reason number one (1). shell company, a private operating company to make public in a reverse merger ago merger with a shell public. A public shell is what remains when a company is bankrupt or in liquidation, and some shells are created as a blank check companies,

A blank check company has shareholders and perhaps a little money in his books, but nothing else, they are created by enterprising entrepreneurs for the sole purpose of the merger of a private company operating it.

What happens is that when the owner sold the hull shell to private enterprise, it retains 5-15% of the shares for himself, above all if the levy increase of $ 500,000.00 for himself. And even if he signed an agreement and not to sell for a year, most of these people can not be trusted and a discharge time of the stock or have someone create a short position on their behalf.

Solution: The owner hull must be made to sell the entire position and settle for silver, which in most cases represents an enormous profit. I donac a‚¬ a„c t have anything against anyone making much money, I am quite because I also have the opportunity to make lots of money, I'm against how they do it.

(2). The shareholder base: For a company will be listed on the NASDAQ Small Cap or OTC Bulletin Board must have a number of shareholders to qualify for registration.

(2A). Poor due diligence: Before buying a shell of private enterprise and they retain the consultant to assist in the reverse merger should make a comprehensive review of the list of shareholders. some of these shareholders may have too many shares and the real beneficiary may own shell or the consultant himself, there is much good about wolves posing as a consultant to work in conjunction with the shell owner.

Solution: First run the Consultanta a‚¬ a„c s name and his former employer t.