Negative Consequences to Individual Investors As A Result of Excessive & Naked Shorting of EquitiesTake TG Therapeutics as an example, it has gone from 9.57 to 5.89 in a matter of 5,6,7 trading days scaring or forcing novice investors out of a position that will eventually recover.
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When will naked or excessive shorting as a result of twisting news or recent headlines to profit from innocent individual investors with limited funds and definitely do not have access to even possibly information not privy to investors outside of the trade. When is the SEC going to step up and prevent shorting to the point of forcing investors out of a position.
$TGTX long – Hi Mosley. This equity is very well covered by the Gummune here: http://www.stockgumshoe.com/2016/09/sea-of-tranquility/
TGTX isn’t currently on the “failure to deliver” list from what I can tell, which indicates that it’s probably not naked shorting (“naked” just means that you don’t find a place to borrow the stock before you sell it short, which can sometimes happen because brokers will often let you do a short sale instantly even though it takes a few days to find the shares to borrow and clear the trade sometimes).
The price can be impacted by negative interpretations of events, of course, but the real value of the company can’t be impacted, so “pile on” short selling can give fundamental investors a great buying opportunity if their analysis or ability to predict the future is better than that of the short sellers.
There is more of a “momentum” short trade these days then there was a decade ago, thanks to the removal of the “uptick rule”, but I think they’re actually better at slowing down “naked shorting” these days.