OTC BB Shorts Are Underwhelming, To Say The Least

Jul.28.06 | About: NewMarket Technology, (NWMT)

For years, a devoted cadre of conspiracy theorists have spread wild tales about vast short positions across OTC BB stocks. Like all good conspiracies, this one thrived in the darkness. There were no reported statistics for OTC BB shorts, so the theory couldn't be verified or debunked. Until this week, that is. The NASD just started reporting short positions in OTC BB stocks. It turns out that the positions are underwhelming, to say the least.

To see the vast disparity between hype and reality, lets look at one of the stocks in my portfolio, NewMarket Technologies (NMKT).

Earlier this week, a company called Buyins.com that claims to have a proprietary method for divining the number of short sales issued a press release stating that 14.5M NewMarket shares have been shorted in recent months. It speculates that a huge short squeeze will be triggered on any move above either $.44 or $.46 (the number changes at different points in the press release).

What's the truth, according to the official figures? Look for yourself:


Short Interest for July 2006
Average Daily
Share Volume
Days to
82,508 100.00 522,347 1.00
Click to enlarge
Click to enlarge
82,508 shares short. I have seen NewMarket trade that amount in a half hour.

Bottom line: more often than not, short squeeze plays are pure hype. They are not for me.

DISCLOSURE: I am long NMKT.OB. I am definitely not long a subscription to buyins.com. Not a recommendation to buy or sell any security. For informational and educational purposes only.