Because you focus on short selling, here is how settlement works in the stock market. When a short sale is executed, the trade is indicated as short to the exchange. The beneficial owner or its agent of the account executing the transaction is required to locate shares for delivery prior to executing the trade. If the account does not, the executing broker may cancel the transaction. The trade still occurred and the broker makes the counterparty whole by buying in the offending account, that is going in the market and buying the stock to close out the illegal short. If the account has obtained a borrow as required, the lender delivers shares to executing broker in return for cash collateral of 100%. The collateral is marked to market every day. The executing broker then delivers the shares to the buyer for the trade amount. The short seller has to retain 100% of the proceeds plus 50% margin. So for every dollar's worth of "phantom shares" there is a real dollar put up as collateral. The trade does not settle if the seller does not obtain real shares to deliver. If the trade fails, the buyer's broker will buy it in after a certain number of days, that is close the transaction by purchasing shares in the market at the risk and expense of the failing party. The buyer's broker can be fined for not buying-in the fail. The seller's broker can be penalized for executing a trade for a customer who has not obtained a borrow. The lender is secured by cash and will buy in the borrower if the shares are not returned when requested. In the equity market, there are too many participants without financial interest in the trade who can be penalized for breaking the rules for any conspiracy of naked short selling to occur. Plus the short seller has to put up real cash. The OTCBB is a different world but represents so little capital as to not be of systemic concern.
The Depository Trust Company is a bank owned by participants in the securities industry. Its primary function is to settle trades. DTC does not make loans. DTC does not own or short stocks. DTC does not own or short derivatives. DTC does not hypothecate securities. DTC holds securities as a nominee for its participant members who are the beneficial owners. A certificate or a direct registration account with the transfer agent exists for each share or principle amount of a bond held by a participant. There are no shorts within DTC. The main purpose of the arrangement is to immobilize certificates, that is to not transfer a paper certificate each time a trade is settled. When a trade settles is DTC updates its participant accounts to reflect the new cash and share balances. DTC could make delivery of every share or bond held at DTC. That is the way DTC is set up. Participant trades do not settle, they fail, if the selling participant does not have sufficient shares to deliver.
If the certificate is lost, stolen or destroyed, you have to pay for a surety bond to get a replacement. That will cost 3% of the value of the shares. If you want to sell, you have to go to a brokerage firm and deposit the certificate. If you don't have a brokeage account, you will have to open one to sell. That process is not immediate. There is no advantage over direct registration. The same transfer agent keeps the shareholder register. It makes no difference if there is a certificate or an account statement, your ownership is recorded. Most large transfer agents have a brokerage relationship so you can sell your direct registration shares through them. The disadvantages versus a brokerage account are that the transfer agent will probably mail a check for your proceeds. Plus if you own shares in numerous companies the record keeping is tedious. You will receive multiple statements, multiple dividend checks that you have to deposit with a bank (well not for TRX) and at tax time multiple 1099's. The reason Sinclair prefers that TRX shareholders have certificates is that it makes it more difficult to sell and it reduces the pool of shares available to lend.
Up 5% for the day up 28% for the year TRX on fire! Rather going down in flames. Stock is down 75% since the peak in 2006. Great stock to own for the long run! If you missed it the first time, the stock is back on sale at Sept 2005 prices. Must be getting set for a run at $9 just like 9 years ago. Back up the truck. Hillbillies are good at that right, backing up trucks? Hard to back it up when it is up on blocks.
For all you nut jobs who think that the paper gold market is going to collapse some statistics.
2013 worldwide gold production 2,920 tonnes/93,880,180 troy ounces
Total Comex open interest 402,276 contracts representing 40,227,600 ounces
So total open interest on the Comex equals less than half a year of production without even considering stocks. The total value of the gold underlying Comex contracts is $52.9 billion. In order for the longs to take delivery, holders would need to pay $50.2 billion in cash.
It is much more deep and complex. Giancarlo (the son-in-law) got the drone for Christmas. He didn't fly it because he was afraid that he'd lose it in the bushes. Also, he needed a job to take care of Sinclair's daughter in the style to which she is accustomed. So win-win. Giancarlo gets a job watching the bulldozers clear a field so he can fly the drone and not lose it. As an added bonus, he can post the video. The topping on the cake is that while Sinclair is in Africa inspecting the project, he may as well stop by and visit his daughter. After all, TRX already paid for the trip.
At the current rate, the money runs out around Thanksgiving. I'm sure Sinclair will be posting pictures of turkeys.
In true TRX fashion there won't actually be a purchase order for anything. TRX will contract with Consulmet to procure sodium cyanide. Much like TRX contracted with Consulmet for the design of a "Turn Key" plant and not the actual turn key palnt itself.
If you watched American History X, they played a basketball game for the court. The loser had to walk away forever. That is my challenge. If you can make a bull case that is superior to my zero call then I will walk away and post no more. If you lose, well you know. A bull case based on a higher gold price lacks merit. There are plenty of investments that have more leverage to an increased price of gold, like gold itself. Besides the best predictor of the future price is the current price. And the paper gold argument doesn't fly either. A TRX share is paper of a company whose primary asset is a joint venture agreement which itself is more paper. Show me how you get to a $200 million market cap from $5 million of assets.
They are down to a little over $3 million right now by my estimate. Financials should be out on July. There is a month and a half lag. Plus TRX might have delayed paying $500K to STAMICO to maintain the Buckreef JV until after the end of the quarter.
GDXJ rebalancing date was June 20th. I suspect the specialist had been accumulating since the beginning of the month in anticipation which drove the price up. The print on the close on Friday was the specialist flipping to GDXJ/Van Eck. Now that there is no demand stock is headed right back down. The specialist probably made about $200K on the trade.
It is for nothing. He is much more of a self-proclaimed expert. All you need to see as proof is the performance of TRX's publicly traded investments over the last three years, down something like75%.
We know what Van T gets paid to say. At fiscal year end 2014 on August 31, I project that TRX will have less than $3 million in the bank. That is not sufficient to fund another year of administrative expenses let alone do any mine development. From wikipedia "The auditor evaluates an entity’s ability to continue as a going concern for a period not greater than one year following the date of the financial statements being audited." Looks like the auditor will have to make a going concern qualification. It is hard to do a private placement with a qualified audit opinion. For you Comedy clowns, qualified is not good. Think restricted or limited. Good would be unqualified.