posted
What does this mean? Anybody please. CBAY -- Cal-Bay International, Inc. Com ($0.001)(New)
COMPANY NEWS AND PRESS RELEASES FROM OTHER SOURCES:
Cal-Bay Retains Prominent Los Angeles Law Firm to Help Combat Short Trading of the Company's Stock
CARLSBAD, Calif., Jun 02, 2006 (BUSINESS WIRE) -- The Board of Directors of San Diego-based Cal-Bay International, Inc. (OTCBB:CBAY) today announced the Company retained prominent Los Angeles Law Firm Richardson & Patel to help combat the short trading of the company's stock. Roger Pawson, President and CEO, commented, "Cal-Bay has retained Richardson & Patel to help combat the obvious short position in the company's tradable stock. Since the recent financing there has been a significant increase in the daily volume along with a dramatic downturn in the stock price. The Company has been trading an average of almost twice the amount of shares in the float on a weekly basis, which in my opinion uncovers a significant short position in the stock. Cal-Bay has been listed on the official NASDAQ short list and is in communication with regulatory authorities."
FORWARD LOOKING SAFE HARBOR STATEMENT
To the extent that this release discusses any expectations concerning future plans, financial results or performance, such statements are forward-looking within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended, and are subject to substantial risks and uncertainties. Actual results could differ materially from those anticipated in the forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof and reflect only management's belief and expectations based upon presently available information. These statements, and other forward-looking statements, are not guarantees of future performance and involve risks and uncertainties.
The Company assumes no obligation to update any of the forward-looking statements in this release.
SOURCE: Cal-Bay International, Inc
CONTACT: Tim Garlin Public Relations Tim Garlin, 760-930-0100 Fax: 760-930-0200 IR*calbayinternational.com www.calbayinternational.com
Copyright Business Wire 2006
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KEYWORD: United States North America California INDUSTRY KEYWORD: Government Law Enforcement Professional Services Legal Communications Public Relations/Investor Relations SUBJECT CODE: Lawsuit
Search for Dun & Bradstreet reports on this company.
BuyTex
posted
to me? it sounds as though they're confused and need help with PRs...
ballyman
posted
Cassity-It is fairly common practice for the "naked short selling" of pennies.
It is a huge problem for most investors to have to overcome. If a stock is shorted it is almost impossible for the investor to make a profit. In a nutshell short selling a stock is accomplished by basically selling stock that is not in hand.
If I was a MM (market maker) and you were a broker and you called me up for an order of 1000 shares of WXYZ stock, I would be obligated to sell your the shares whether or not I had them. If I declined to sell you the shares, you then could either tell your client, "I cannot get you the shares" or the more likely situation you would move on to the next MM. If I did indeed sell you the shares, which in this situation I did not have in my possession, that is what is called a short. I sold you a stock that is not in my possession. Now I have to cover, which means now I have to rely on someone selling 1000 shares of WXYZ stock in order to balance the market.
What this press release is saying is that more shares are being sold than what is in the float. Say there are 1000 shares in the float, that means only 1000 shares can be sold. Once the float is gone there is nothing more to sell. In this situation shares are still being sold, ignoring the fact that the float has been consumed.
Therefore red flags are flying everywhere calling for a review, bring on the lawyers. Every transaction is recorded, the MM who sold the stock has their name written down on that transaction. Therefore if this goes to court that MM will get a phone call. More and more small businesses are pointing this problem out, which is a good thing for us.
Here are a few more links with more details than what I can provide:
Hope this helps some. There are a lot of other good folks around here to that have a wealth more information/experience than I got. Just hang out and read as much as you can. Don't be afraid to ask questions.
Ball
cassity
posted
Thank you for the the information ballyman, I wasn't real sure if this was a good thing or bad. Thanks for your time.
BuyTex
posted
cassity,
that is some good background...
the flip side is, perfectly legal for MMs to short when necessary to make a market...it just goes with the job.
Naked shorting altogether different--however, experienced traders are aware that many pennies start pointing fingers at "naked shorts!" when they are, in fact, diluting...
not saying this is the case here, but that poorly worded PR raises more questions than it answers...
ballyman
posted
quote:Originally posted by BuyTex: cassity,
that is some good background...
the flip side is, perfectly legal for MMs to short when necessary to make a market...it just goes with the job.
Yep, it is no different than any business for that matter, parts are parts. If I go down to the local hardware store and Hank tells me he ain't got the part, but says "I'll get it for ya". Its when the product cannot be presented and monies were exchanged, becomes the problem. A deficit/hole occurs.
The problem that I don't quite have a grasp on is when the company is added to the short list or the naked short list and then the company itself is scrutinized.
IMO it isn't the company's fault, it is the MMs who either oversell or short the stock. In this case the company is now under review by the SEC (I'm assuming it is the SEC).
Then if the situation does not correct itself, all trading for that stock ultimately could be halted, which could ultimately destroy the company. It seems that the company is penalized versus those responsible.
There is a piece to the puzzle that I am missing.
Ball
FIST13F
posted
Hey I am not in Cbay, but the last time I saw a PR identical to this one was HWYI Hathaway INC, Their stock went from .10 to .90 in 3 days. Just FYI...
ballyman
posted
The possible answer to my missing piece.
If the company is evidently aware of the naked short selling, yet continues BAU, keeps the investors money, never stops to ensure a correction is made or make the appropriate calls, never makes their investors aware of the situation. Then yes IMO the company is to be held responsible and should be in communication with the SEC.
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