Subject: Shorting and the up tick rule S7-25-08

September 23, 2008

Dear Commissioner,

Please reinstate the up-tick rule.

After listening to far to many talking heads that keep saying "We need to be able to short a stock to let the market determine the true value of a company," it dawned on me that without the up-tick rule, shorting becomes a self-fulfilling prophecy in a company's destruction and/or demise.

Since a publicly traded company is owned by its shareholders, every time someone sells shares short and causes the stock's price to drop, they really have taken some value out of the company. And since the value has dropped, why pay more than the latest price for a company unless it does something amazing, or has a promising future. And as the price drops, more value disappears.

The up-tick rule served a very useful function in that it kept miscreant shorters honest in that they couldn't just keep sticking the knife into a company until they killed it. After they have killed it, they get to keep all the value they took out of company by buying back the now vastly de-valued, or worthless, shares and returning them to the previous owners of the now worthless stock. What a racket.

Since the hedge funds have run out of pockets of value to rob, they have made an art of taking value out of a company and the stock market, much to the detriment of the average stock or mutual fund share holder.

If you don't re-instate the up-tick rule, and re-establish belief in the market, we are going to wild up with a dead market.


Olathe, KS