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Thank you for the advice. This is a little special because the owners of the loan company have been fined by the SEC for precisely the naked short selling I am
by abritrum 5y ago
Thank you for the advice. This is a little special because the owners of the loan company have been fined by the SEC for precisely the naked short selling I am accusing them of (without revealing them, an unrelated case is https://www.thestreet.com/investing/stocks/sec-charges-filed-in-sedona-case-10277405 https://www.thestreet.com/investing/stocks/sec-charges-filed...). Naked shorting a stock to 0 and claiming tax benefits is what some of these toxic lenders do. I am invested only in the amount I can afford to lose. But I would like to not lose even that :-) so will heed your advice.
- ProjectArcturis 5y agoDoes the stock you like have a death-spiral PIPE deal like the one in the article? If so, sell. You're correct that someone is pounding the stock down, but what you're missing is that management is helping them do that by printing new shares and selling to the PIPE lender at a discount. It's just a way for management to pay their own salaries by diluting the existing shareholders. There will be no reckoning. What they're doing is scummy but legal. The selling will only stop when no outsiders will buy any shares at any price. Well, legal as long as they don't short ahead of time. But either way, it's a terrible investment for you.
- abritrum 5y agoThey had a death spiral PIPE deal, but they paid off the loan. The company was (edited: almost) shorted to death in the months during they had the loan. Appreciate the advice.