Bloomberg special on Naked Short Selling
- Thread starter flytiger
- Start date
LOL. Well you are a bit naive and show signs of an amateur, but you do make a valid point that is being somewhat ignored. The reality is that almost all of these naked short companies are not exactly grade A stock, far from it. OSTK is not worth 70 bucks a share or anywhere worth it. The naked shorts do target questionable companies, which often are manipulated to the upside in the first place. Actually, naked shorts like companies that are more likely failures than successes, or at least seem that way at the time.
That being said, you do lack any understanding of borrowing costs and finance alternatives for publically traded companies. I would suggest reading Soros' "Alchemy of Finance", but it is a tough read and I think you lack the critical thinking to understand his theory of reflexivity. The reality is that a sharp & dramatic drop in price does affect the company's actual business in a negative way. Ideally, it should not, but it does, that's just how people think in this Wall Street glorified rah rah CNBC society. I don't think I need to go into exact examples, you should be able to figure it out. It does take time to get a business up and running, being naked shorted to artificially low prices is certainly not a help.
What's interesting is that I had a discussion with someone about 1-2 years ago. My argument was that these were phantom shares being executed, they do not exist so it's manipulation. He said, well what if someone on the other side wanted to buy more shares than there are and kept driving up the price. My only real response was that the buyer would never be executed, while these naked shorts are getting effective executions and causing downticks. He replied with, "well what if the buyer put in an absurd bid and kept moving it up?". So it becomes a capitalization issue, in reality. Naked shorting VLO into the ground would be quite a feat, as almost every major institution owns that stock and at some price, a serious investor would acquire a controlling stake and would either take it private or move for liquidation. But OSTK and TASR, ehh, apparently no big money feels that strong about those two "gems".
In conclusion, one needs to learn about US stock market history, particularly the 1930s days of JPMorgan & gang when they destroyed any public company they could by naked shorting them under the ground. That's where the uptick rule came from (hmm anyone see a pattern in SEC "solutions"). Putting the other manipulations of that time period aside, I think it's pretty obvious that naked shorting can be quite manipulative & destructive, especially in the hands of big money. And while the OSTK CEO is a whiny bitch that should spend more on that energy on his company (which is not innovative or well run), absurd levels of naked shorts, like more shares short than there are outstanding, should seem against even borderline fair market practice to anyone who is not borderline retarded.
But OSTK and TASR, ehh, apparently no big money feels that strong about those two "gems".
You can't just simplify it to these levels. Investors, and big investor, know the score, and they do not get involved in a company where they know the big name naked shorters are. They realized they can't win.
I know a fellow with millions of a particular stock. Well know company, never on the SHO but heavily shorted, so it's probably grandfathered. The Company is profitable, that is all I'm able to say about it.
When they do a road sho, the investors politely eat the canapes, and just say, "XXX is involved on the short side. We just can't own this."
You can't just simplify it to these levels. Investors, and big investor, know the score, and they do not get involved in a company where they know the big name naked shorters are. They realized they can't win.
I know a fellow with millions of a particular stock. Well know company, never on the SHO but heavily shorted, so it's probably grandfathered. The Company is profitable, that is all I'm able to say about it.
When they do a road sho, the investors politely eat the canapes, and just say, "XXX is involved on the short side. We just can't own this."
byrnes isnt whiny at all. he has an obligation to his shareholders to fight this illegal financial terrorism. the fact he has to fight our own govt is the part you people are missing.
this is the SEC and the DTCC.... they have a complicit media working with them. politicians are looking the other way. Cox is a panzie on the take. shelby is a scoundrel. cnbc pulls the story whining about middle eastern connections. call this mafia if you like but it is bigger than that.
but to call one of the few people with integrity and the guts to fight this whiny is bizarre to me.
Sprstpd, you are right, and the others can eat shit, simple as it is. Sure, naked shorting is illegal and should be dealt with, it should be technically impossible, but here are a few ponderables:
1. If you short too heavy, you also have to cover heavy, thus that action should have a price raising effect. Trying to manipulate a stock was never a riskless activity...
2. These companies complain rightfully that sometimes 110% of their stocks are being shorted or such. But their price could be failing just the same if only 80% would be legally shorted.
3. Current price and fundamental price shouldn't get away from each other too much, at least not downward.
Once the current price go WAY below the fundamental value of the company, some smart value investor with money should step in and buy the stock.
4. These companies if they really have real fundamental values just could by back their own and now very cheap shares. Once the market recognizes the true value, and the outstanding stock number decreased, thus the company could take advanage of its market cap increaseing and controlling most of the shares....
So before you personally attack me, address these issues, idiots....
1. If you short too heavy, you also have to cover heavy, thus that action should have a price raising effect. Trying to manipulate a stock was never a riskless activity...
2. These companies complain rightfully that sometimes 110% of their stocks are being shorted or such. But their price could be failing just the same if only 80% would be legally shorted.
3. Current price and fundamental price shouldn't get away from each other too much, at least not downward.
Once the current price go WAY below the fundamental value of the company, some smart value investor with money should step in and buy the stock.
4. These companies if they really have real fundamental values just could by back their own and now very cheap shares. Once the market recognizes the true value, and the outstanding stock number decreased, thus the company could take advanage of its market cap increaseing and controlling most of the shares....
So before you personally attack me, address these issues, idiots....
Tasr AP story out.
http://news.moneycentral.msn.com/ca...=6601450&industry=IND_AEROSPACE_DEFENSE&isub=
Those of you not on some sort of anti - depressant, or do not have their lips pressed firmly against some Hedge Fund Scumbags ass, ponder this:
Sales were going through the roof," Smith said. "Virtually no one was competing with us."
But on Jan. 6, 2005, a letter from the Securities and Exchange Commission rolled into Taser corporate offices. The federal agency said it was looking into the company's safety claims and a $1.5 million sale that appeared to inflate the company's sales to meet annual projections.
Taser had previously brushed aside claims from human rights groups that its weapons were potentially lethal. Now the government was going to take a look.
"I was infuriated," Smith said. "We knew the perception was 'Wow, they must have done something wrong.'"
Taser's stock plunged 30 percent the following day to $22.72 per share. Within a few months, it was worth $8.09.
This was all a set up. After, the SEC said, "never mind". For 1.5 mm???? ANybody notice Regulation SHO was one day old when that happened, like somebody needed a new ploy to cover those old shorts??? 35 to 8 in three months on its way to five.
Nice trade. And you booger eating morons thing that these guys are brilliant, and you want to be like them. Let's see when they're slow dancing with big hairy men you think that way.
http://news.moneycentral.msn.com/ca...=6601450&industry=IND_AEROSPACE_DEFENSE&isub=
Those of you not on some sort of anti - depressant, or do not have their lips pressed firmly against some Hedge Fund Scumbags ass, ponder this:
Sales were going through the roof," Smith said. "Virtually no one was competing with us."
But on Jan. 6, 2005, a letter from the Securities and Exchange Commission rolled into Taser corporate offices. The federal agency said it was looking into the company's safety claims and a $1.5 million sale that appeared to inflate the company's sales to meet annual projections.
Taser had previously brushed aside claims from human rights groups that its weapons were potentially lethal. Now the government was going to take a look.
"I was infuriated," Smith said. "We knew the perception was 'Wow, they must have done something wrong.'"
Taser's stock plunged 30 percent the following day to $22.72 per share. Within a few months, it was worth $8.09.
This was all a set up. After, the SEC said, "never mind". For 1.5 mm???? ANybody notice Regulation SHO was one day old when that happened, like somebody needed a new ploy to cover those old shorts??? 35 to 8 in three months on its way to five.
Nice trade. And you booger eating morons thing that these guys are brilliant, and you want to be like them. Let's see when they're slow dancing with big hairy men you think that way.
Somebody tell me what the fundamental value of OSTK is!! Until that, I have found this funny:
"Overstock shareholders must be 1st rate fools happy to own a 2nd rate internet retailer managed by a 3rd rate CEO whose 4th quarter numbers were awful (400-bps gross margin miss and a 100% negative variance on EPS?), and for the 5th consecutive Q missed the prior sunny forecasts we can expect to be missed for a 6th time in May.?"
"Overstock shareholders must be 1st rate fools happy to own a 2nd rate internet retailer managed by a 3rd rate CEO whose 4th quarter numbers were awful (400-bps gross margin miss and a 100% negative variance on EPS?), and for the 5th consecutive Q missed the prior sunny forecasts we can expect to be missed for a 6th time in May.?"