Burying Your Company Stock

image

You must bury the shares of your public company to reduce its float. The lower your public company's float, the lower your investor relations cost. [See my article The Proper Use of Shares.] The buried shares are deducted from your float and the balance is called the effective float. You want to get the effective float as close to 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. If you want your company to be successful in every aspect, I recommend that you structure the float of your company this way.

Speculators, Not Investors

American stock buyers, on the whole, are speculators, not investors [http://www.iht.com/articles/529443.htm]. Stocks are bought with the intention of selling them quickly at fxcm a profit. Even the U.S. Government realizes that speculation doesn't 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

My over 20 years involvement in North American stock markets have proven to me that Market professionals make more money selling stocks short (betting that the price of the shares will go down and the company will go bankrupt) than they do by buying 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. It is the only way to effectively defend against short selling. Make sure that your company shares are not in possession of the Depository Trust Company in New York.

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 rely or "borrow" street stock in order to sell shares that are not present on the market. Public short sellers anticipate paying back the "borrowed shares" at a much lower price when the stock crashes. Professional short sellers never expect to buyback the nonexistent shares and legally avoid U.S. taxes on their profits in doing so. If the shares are not there to be borrowed, your company can't be sold short.

If you can prevent your shares from being sold on the DTC by having your shareholders insist that they receive their certificates in person, then your company has a Cash Market. Few companies bother or understand the dangers they run from short sellers. Brokerage firms and DTC try to make it as difficult as possible to create Cash Markets in any stock.