Investors: Press Release
GeckoSystems' CEO Reports Progress In Thwarting Naked Shorting
CONYERS, Ga., Sept. 29, 2010 -- GeckoSystems Intl. Corp. (PINKSHEETS: GCKO) --announced today their transfer agent, Continental Stock Transfer & Trust Company, has apprised them of the costs and procedures for their role in the three scenarios recently revealed as capable of ending the massive naked shorting of GCKO stock and the consequent depressed price.
"Since our last press release revealing the insights provided by one of our more astute investors, the percentage of daily shorting has dropped dramatically from 40-50% --or more-- to less than 20%. Those revealed scenarios were:
- Issue dividends, i.e. cash and/or stock
- Buy back shares
- Forward split shares, eg. 2 for 2.1, etc.
"While we have not reduced the naked shorting to zero, or near zero, our press release last week has demonstrably reduced the magnitude and frequency of this predatory practice. The majority of GCKO investors commenting since our press release last week stated the issuing of a small dividend to be their preference. We certainly agree. To that end we are focused on how we might most cost effectively and expediently effectuate that benefit to our stockholders. Our recent discussions with our transfer agent, Continental, are on path to that goal. We did not find the costs and/or administrative overhead to be prohibitive.
"Due to having three ongoing discussions with overseas prospective licensees, we cannot eliminate the possibility of a small cash dividend. Generally speaking, dividends primarily communicate senior management's confidence in the continued performance and/or improvement of the corporation. However, we also believe that should an extraordinary technology licensing agreement occur, our stockholders should participate in those net profits after taxes, even if to a very limited degree," commented Martin Spencer, President/CEO, GeckoSystems.
GeckoSystems reported recently that over 80% of their nearly 1,400 stockholders hold 500,000 shares or less representing nearly 50% of all freely traded shares. The average holding for all GCKO investors is slightly over 88,000 shares each.
"We are very appreciative of the over 1,000 small investors that have been patient in the face of massive naked shorting of GCKO stock. Typically these predatory brokers and/or brokerages short our stock down nearly each and every time we have a press release. Certainly as we continue, as most small businesses, to recover from the Great Recession brought upon us by de facto Wall Street greed, this is nonetheless a painful artifact to endure during these times of continued economic uncertainty. What is not uncertain is GCKO management's commitment to thwart these economic predators by exposing their nefarious activities and by reassuring our stockholders that the vast majority of them are 'long,'" stated Spencer.
Continuing, there are only 17 shareholders with 1,000,000 or more shares. They hold over 36% of all stock in the public float with over 35 million shares total with an average holding of nearly 2.1 million shares. This group is pretty well known to management and virtually all are considered "long."
The remaining grouping is those stockholders with less than 1,000,000 shares, but 500,000 or more. This group of 24 shareholders hold slightly over 16% of all stock in the public float with nearly 16 million shares total with an average holding of about 650 thousand each.
It has come to our attention --not infrequently-- that in recent weeks and months GCKO stock has been massively shorted. However, as a company, we now have some new scenarios to thwart completely, if not minimize the naked shorting of our stock, aside from reporting it to FINRA and/or the SEC. However, indirectly we would ask those stockholders that are truly 'long' to contact their broker immediately and ask that their GCKO stock be placed on their "no loan" list forthwith.
A little over a month ago, on the same date, GeckoSystems management secured lists from Broadridge and The Depository Trust & Clearing Corporation (DTCC) that quantify how many GCKO shares are held by which brokers and/or clearing houses. Unless naked shorting is occurring, the quantities of stock held by the brokerages should be the same, or nearly so, from both Broadridge's "NOBO" list and DTCC's "SPR" list.
DTCC, through its subsidiaries, provides clearance, settlement and information services for equities. Broadridge provides mission-critical products and services for securities processing, clearing & outsourcing, and investor communication.
The eight brokerages/clearing houses holding the most GCKO shares for clients on this same date last month were:
Brown Brothers/Harriman (NOBO: 500,000; SPR: 3,744,357),
Charles Schwab (NOBO: 9,327,536; SPR: 9,979,476),
E*Trade (NOBO: 12,719,363; SPR: 12,859,605),
National Financial Services (NOBO: 11,593,340; SPR: 11,714,740),
Penson Financial (NOBO: 8,345,263; SPR: 8,497,990),
RBC Capital Markets (NOBO: 8,190,646; SPR: 6,269,446),
Scottrade (NOBO: 14,401,790; SPR: 15,018,489),
and TD Ameritrade (NOBO: 18,694,690 ; SPR: 21,738,670).
A cursory perusal reveals that five of the foregoing are "pretty good." The other three depict significant differences in their GCKO holdings to Broadridge and DTCC. Some GCKO investors may wish to notify their broker to place their GCKO stock on their "no loan" list to coerce their brokerage into not using their personally held GCKO shares for any shorting whatsoever of GCKO stock, especially if your stock is being held by any of the less rigorously compliant brokerages and/or clearing houses noted in the preceding.
"By making more company information publicly available as to stock structure, beneficial owners, etc, GeckoSystems is attempting to foster an efficient secondary trading market and provide greater understanding of our business model for investors, advisors, and regulators in the OTC market," said Martin Spencer, President/CEO, GeckoSystems. "We hope that our meeting the Current Information guidelines will allow us to better satisfy the needs of our stakeholders by providing high quality disclosure to investors via Pink Sheets."
The term "OTC securities" is a catchall phrase for any equity security that is not listed on a U.S. stock exchange. The OTCQX and Pink Sheets marketplaces constitute, by dollar volume, the third largest U.S. liquidity pool for trading public company shares, after The NASDAQ Stock Market, Inc. (NASDAQ) and The New York Stock Exchange (NYSE).
Late this past August, GeckoSystems announced that its stock is now quoted in the U.S. over-the-counter (OTC) markets, on the Pink Sheets "Current Information" tier, under the ticker symbol GCKO.
In the last four years GeckoSystems secured its trading symbol, GCKO, by satisfying FINRA's 15c2-11 requirements. Subsequently GeckoSystems became DTC eligible and a DRS participant to further enhance stockholder liquidity and value. Now GeckoSystems has satisfied Pinksheets requirements to be designated: Current Information.
Due to the need for equity financing for high growth firms, GeckoSystems has worked for over ten years to become fully reporting as soon as financially viable. In fact, the Company has been successfully audited twice, for two year periods each, and found to be fully compliant under thorough outside financial audits prepared by SEC certified CPA firms with the Financial Accounting Standards Board's (FASB's) generally accepted accounting principles (GAAP).
"Due to the level of risk inherent in high tech, emerging market Development Stage firms such as ours, especially during this Great Recession, we understand clearly that only equity (not debt) instruments can provide sufficient return on investment (ROI) for investors to assume the risk of purchasing any high tech, emerging market stock such as GCKO stock. Hence our long time efforts in this regard, and determination to continue our move upward to not only a more pronounced domestic stock exchange, but also those with international reach, such as OTCQX," observed Spencer.
GeckoSystems received their Pink Sheet trading symbol, GCKO, from FINRA as a result of satisfying all their due diligence requirements from the filing of a Form 15c2-11. The Company has no unaccounted for, or otherwise missing, shares outstanding and issued. "We worked for nearly a year in preparing our initial 15c2-11 submission to, and addressing the comments of, FINRA prior to their issuance of our trading symbol, GCKO. We received our trading symbol, GCKO, from FINRA in September of 2007. In order to enable electronic trading we became DTC eligible in January of 2008. As a DRS Participant, the ability to trade GCKO stock electronically is even more streamlined, efficient, transparent, and reliable," stated Spencer.
DRS provides for the electronic direct registration of securities in an investor's name on the books of the transfer agent or issuer. It allows shares to be transferred between a transfer agent and a broker electronically through the industry's DRS Profile Systems. Historically, investors hold their shares either in "street name" with their broker, or they are "registered shareholders" and have a certificate. Consequently, the Company is in a position, as a DRS participant, to readily identify those parties engaging in "naked short selling" of GCKO stock.
"We will continue to do everything in our power to be completely, but prudently, transparent with our shareholders. We wish to assure our stockholders that this greater efficiency in the marketplace for our stock will further enhance the value and liquidity of GCKO stock and increase the ROI for them as we continue in our efforts to move upward to more pronounced domestic and international stock exchanges. We are presently evaluating the dividend scenario very carefully as to costs and efficacy as to how we may structure a dividend and achieve the best ROI for our nearly 1400 shareholders, " summarized Spencer.