long $gme?
Counterfeiting Stock – Explaining illegal naked shorting and stock manipulation
91–100 of 403 posts
Re: Counterfeiting Stock – Explaining illegal naked shorting and stock manipulation
#92Earlier quoted context omitted.
This doesn't distinguish between shorting and naked shorting. But in either case I don't understand why I'm supposed to be upset. Is it because the stock price goes down?
Does it matter? 1 stock = 1 stock. 1 stock should never be 2 stocks. It’s because I believe in ownership of what you make. If you founded a company, sold 10% on public markets for float, and magically 20% of your cap table now exists on the NYSE; something is horrifically wrong. And yes, you would have suffered negative financial outcomes because of the counterfeiting.
There’s not just “1 stock.” Let’s say: A loans a share to be B who sells to C who loans to D and so on. You end up with a multiplier on nominal stock, always, and that’s perfectly normal. I really don’t understand the moralistic argument here, esp. without regard to the underlying value of the original asset. Up is not strictly good.
Re: Counterfeiting Stock – Explaining illegal naked shorting and stock manipulation
#93Earlier quoted context omitted.
This doesn't distinguish between shorting and naked shorting. But in either case I don't understand why I'm supposed to be upset. Is it because the stock price goes down?
With normal shorting the number of shares being traded is no greater than the float. Only with naked shorting can there be more shares traded than float, as in the parent's example. Interestingly, in both cases the short interest can be greater than 100%. My understanding is that naked shorting can be used to artificially lower the stock price by increasing the supply with the ultimate goal of driving the company int…
Both naked shorting and regular shorting reduce the price of the stock. In the case of regular shorting, there is a sale offer that wouldn't have been and was, and in the case of naked shorting, there is a buy offer that would have been and wasn't.
Re: Counterfeiting Stock – Explaining illegal naked shorting and stock manipulation
#94Very, very much a crank site. One pinch fact, two cups of confusion, and generous splash of seething rage.
It's interesting in much the way the Timecube site is interesting...and is informative about financial markets in much the same way the Timecube site is as well.
Re: Counterfeiting Stock – Explaining illegal naked shorting and stock manipulation
#95The author seems to be really upset about this, but I don't understand why. Nothing they are describing, if you ignore histrionic language like "counterfeiting", seems especially nefarious. Maybe I am misunderstanding. Basically, a short is when A borrows from B a share of corporation C with the promise to return a share of corporation C at a later time, plus some cash interest. A naked short is where instead B gives…
When A borrows a share, they sell it to D. Now as far as anyone knows, both A and D own a share but in fact only one exists. The extra sale from A to D also influences the stock price. What some consider bets are creating actual volume on the exchange, along with temporary dilution of shates.
What do you mean by "temporary dilution of shares"?
All the shareholders will get dividends, for example. The same as if there were no shorts. The only thing that those who lend their shares will lose is the voting rights - and those who don't lend their shares will vote normally.
Re: Counterfeiting Stock – Explaining illegal naked shorting and stock manipulation
#96Re: Counterfeiting Stock – Explaining illegal naked shorting and stock manipulation
#97The author seems to be really upset about this, but I don't understand why. Nothing they are describing, if you ignore histrionic language like "counterfeiting", seems especially nefarious. Maybe I am misunderstanding. Basically, a short is when A borrows from B a share of corporation C with the promise to return a share of corporation C at a later time, plus some cash interest. A naked short is where instead B gives…
When I purchase a stock, I do it in the express belief that I will get a physical (though digitally stored) share of that company, and possibly one that gives me a voting right if the stock is marked as such. When a stock “fails to clear” this gives me a ton of problems such as slippage and volatility, and possibly a quite substantial loss. Same if you buy an apple, I'm sure you'd only do it in the belief that you wi…
I don't know if you are aware of this, but you are basically arguing against the idea of fungibility in finance. It's one of those fundamental concepts that banking is built on.
It's one thing to argue for making sure shorts are well-regulated, but this something entirely different that has the risk of fundamentally breaking our society.
Re: Counterfeiting Stock – Explaining illegal naked shorting and stock manipulation
#98Earlier quoted context omitted.
This doesn't distinguish between shorting and naked shorting. But in either case I don't understand why I'm supposed to be upset. Is it because the stock price goes down?
Does it matter? 1 stock = 1 stock. 1 stock should never be 2 stocks. It’s because I believe in ownership of what you make. If you founded a company, sold 10% on public markets for float, and magically 20% of your cap table now exists on the NYSE; something is horrifically wrong. And yes, you would have suffered negative financial outcomes because of the counterfeiting.
Your explanation makes a lot of sense. Nonetheless it's bit of a hard sell as it seems to parallel fractional reserve banking to a degree, and we've come to accept the later as the best currently available compromise.
Re: Counterfeiting Stock – Explaining illegal naked shorting and stock manipulation
#99Earlier quoted context omitted.
Fraudulent company is not a general case. Such companies must be closed by regulators, not short sellers. Do you think it is a good idea to help Intel go bankrupt because it's shitty right now in comparison to AMD?
What is the mechanism by which you think shortsellers cause companies to go bankrupt? Can you think of any examples of short sellers causing a bankruptcy?
They soak up investor money that would have otherwise gone towards sufficiently capitalizing the company (via equity raises).
Re: Counterfeiting Stock – Explaining illegal naked shorting and stock manipulation
#100This article is quite biased. There are a few problems with it: 1- The stock market should not kill a healthy company. Sure, it can affect its money raising capabilities (and maybe hiring) but it should not drive it out of business. 2- Naked Short-sellers still have to pay interest and dividend on their sold shares. This would create a certain equilibrium. If you nake-shorted a company at x2 its value, you suddenly d…
The article also deals with the parts about actually defaming, attacking in courts and otherwise doing everything possible to actually bankrupt the company... It doesn't only cover the stock market, it covers the whole operation, which goes way beyond only the stock market.
Rules already exist around what you can and can't say as a short seller. What is it that you don't like about them? Do you think no one should be allowed to say negative things about companies?
Shorts can't drive companies in the ground if that's not where they're headed anyway. First of all most short sellers are not activists. The perception that shorts causing companies to tank is because activist short sellers are right a high percentage of the time so often their reports result in a quick price adjustment. Being an activist short seller is a very high risk activity so they tend only to pull the trigger when they have high conviction. For example I'm not sure Muddy Waters has ever been wrong in calling out an accounting fraud. I have a really hard time buying the line that short sellers bring down good companies (examples?) and the fact that people do think that seems to me more of an indication of the power of corporations and their management than anything else.