Burying Your Company's Stock

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You must bury the shares of your public company to reduce its float. Your investor read full report relations costs will be lower if your public company has a lower float. [See my article The Proper Use of Shares.] The buried shares will be deducted from the float, and the remaining amount is the effective float. Your goal is to reduce the effective float to as near zero as possible. You don't need to find buyers if your effective float is 0. There are no shareholders who want to sell their shares in your company. This, of course, is the ideal situation. I suggest that if you want your public company to succeed in all aspects, you may want to structure your company's float like this.

Speculators are not investors

American stock buyers, on the whole, are speculators, not investors [http://www.iht.com/articles/529443.htm]. They buy stock with the hope of quickly selling it at a profit. Even the U.S. government realizes that speculating does not lead to economic growth. Taxes for stock buyers willing to hold their shares for at least one year are less than for those who speculate in the Market and quickly sell their stock. Tax incentives from the American government have not changed the speculative nature in the U.S. Market because long-term investors continue to lose money. I've often wondered why these long-term investors continue to buy and hold shares in such a manner?

Avoiding Your Shares Being On The Market

I have been involved in the North American stock market for over 20 years and can confirm that professionals make more money by selling shares short (betting on the fall of the share price or the bankruptcy of the company) than by purchasing shares. There are over twenty ways to short sell stocks that are not listed in textbooks. I have written an article on shorting shares that includes 24 ways. The only effective defense to short selling is to ensure that the Depository Trust Company (DTC) in New York doesn't have any of your company's shares in their possession.

When most people buy shares, they leave them "in street name" rather than taking possession of the share certificates. In street name, they are simply turned over to DTC. Short sellers "borrow" or otherwise rely on the existence of street stock to sell nonexistent shares into the company's market. Public short sellers expect to pay the "borrowed" shares back at the much lower cost when the stock collapses. Professional short sellers do not expect to be able to legally buy back the shares that aren't there and avoid paying U.S. tax on their profits. Your company cannot be sold short if the shares can't legally be borrowed.

If your company can keep your shares away from the DTC, by having all your shareholders demand physical delivery of their share certificates, your company is said to have a Cash Market in its stock. Few companies are aware of the dangers that short sellers pose. Brokerage firms and the DTC work very hard to make it extremely difficult to create a Cash Market in any stock.