Thank-you very much 007,

But what a loaded question.

Let me see if I can do it justice.

First let me be clear; the following is my opinion alone and should not be used or construed as investment advice.  I may be totally wrong.  It is derived from my limited experience, and it should be read with that in mind.

Theoretically, shorts are supposed to play a useful role in determining fair market value.   The concept is simply a mechanism allowing someone who does not own stock, the ability to borrow it and sell what he borrowed in the hopes of buying it back cheaper by (locking in the difference as a gain) and paying back the loan with the stock he purchased.  Theoretically this would allow someone who, when  faced with the same public information as everyone else, and believes a stock is overvalued, to profit from that insight (as opposed to those who are buying the stock because they believe when  faced with the same public information that the stock is undervalued).  Theoretically the balance between those buying, and those selling and shorting, would provide a fair value of the stock…theoretically. 

I say theoretically because shorting is prone to concurrent manipulation of information with the goal of creating an artificial sell off thereby creating the ideal situation where the short could buy back the stock at a lower price.  When I say manipulation of information I do not mean presenting a different view of the same facts that others have drawn different conclusions from (this would be ok in my books,  and may actually help in determining fair market value).  What I am referring to by manipulation is knowingly misrepresenting information, creating concerns that they know are not real, or just outright lying.

Regretfully, this type of manipulation is often seen in penny stocks, with relatively low volume, and which  do not have analyst coverage to provide a credible 3rd party perspective...and regretfully the TSX.V by its very nature provides plenty of targets.

What makes things worse is that it is very hard to prosecute; People have the right to say and post stupid things.

Now let me describe how shorting has a useful purpose:  If you are an owner of a convertible debenture, or a warrant, and you find the price in the market to be one you would like to sell at, but you don’t want to have to wait several days to convert your debenture or warrant into shares and risk a drop in the stock price in the interim, you could short the stock by borrowing it then sell what you borrowed at the price you determined was right for you, convert your debenture or warrant, and pay back the stock loan with the shares you obtain from the conversion.

Regretfully, I believe that shorting activity with concurrent manipulation is a very real concern on the TSX.V. Furthermore, I do not see why  Pyro would have been immune to manipulative shorting when so many others are and, in fact, I am almost certain pyro has been a victim of such activity but, as I said, it is very difficult to prosecute.  I am sure the regulators share my distaste for such activity and would throw all manipulative shorts behind bars if they could.

I trust that helps answer your question.

…but before I close…and just in case there should  be any manipulative shorts out there… I have the refrain of a song dedicated just to you, from me:

https://www.youtube.com/watch?v=z5X5zh00rdg

;-)

Peter