Paper: The Concentration of Undelivered Shares Among Threshold Securities: Prospects of Stock Manipulation Using Naked Short Sales

Paper

The Concentration of Undelivered Shares Among Threshold Securities:
Prospects of Stock Manipulation Using Naked Short Sales

Robert J.  Shapiro

Sonecon, 14 November 2005

American public companies and their shareholders face a significant threat. Last year, researchers determined that naked short sales – short sales in which the shares are credited to buyer, but the short seller fails to borrow and deliver those shares – occur on a large scale, often extending for months at a time. New data now suggest that these “failures to deliver” or “fails” are concentrated in a relative handful of companies. This raises the prospect of naked short sales being used to manipulate some companies’ stock prices. The enormous extent of naked shorting and its likely use in stock manipulation could threaten the integrity of our financial markets and international confidence in them.

PDF (13 pages): The Concentration of Undelivered Shares Among Threshold Securities: Prospects of Stock Manipulation Using Naked Short Sales

Article: Overstock.com CEO Patrick Byrne is waging an EXTRAORDINARY CAMPAIGN against short-sellers. The hedge fund guys say he has underperformed. He says they are tools of a sinister “SITH LORD.”

Article - Media, Publications

Overstock.com CEO Patrick Byrne is waging an EXTRAORDINARY CAMPAIGN against short-sellers. The hedge fund guys say he has underperformed. He says they are tools of a sinister “SITH LORD.”

BETHANY MCLEAN, 14 November 2005

Even hardened denizens of Wall Street were shocked by a conference call that Patrick Byrne, the CEO of online retailer Overstock.com, held on Aug. 12. “I want to get something off my chest,” Byrne announced. Then he launched into a rant about a “miscreants ball” in which he mentioned hedge funds, journalists, investigators, trial lawyers, the SEC, and even Eliot Spitzer. “I believe there’s been a plan since we were in our teens to destroy our stock, drive it down to $6–$10 … and even a plan for how the company would then get whacked up.” The “designated final owner,” who provided the “orchestration,” was someone Byrne dubbed the “Sith Lord,” a person he refused to identify other than to say that “he’s one of the master criminals from the 1980s.” And that’s just the basic outline. There was more. As Mark Cuban, the billionaire investor, later wrote on his blog, “Never before in the history of Wall Street has a single conference call mentioned the following topics: miscreants, an unnamed Sith Lord he hopes the feds will bury under a prison, gay bathhouses, whether he is gay, does cocaine, both or neither, and an obligatory ‘not that there is anything wrong with that,’ phone taps, phone lines misdirected to Mexico, arrested reporters, payoffs, conspiracies, crooks, egomaniacs, fools, paranoia, which newspapers are shills and for who, payoffs, money laundering, his Irish temper, false identities, threats, intimidation, and private investigators. All in 61 minutes.” Cuban is now short 20,000 shares of Overstock. Continue reading “Article: Overstock.com CEO Patrick Byrne is waging an EXTRAORDINARY CAMPAIGN against short-sellers. The hedge fund guys say he has underperformed. He says they are tools of a sinister “SITH LORD.””

Article: Overstock’s phantom menace

Article - Media

Overstock’s phantom menace

Bethany McLean

CNN Money, 1 November 2005

Patrick Byrne, the 42-year-old CEO of online retail liquidator Overstock.com, is under growing pressure to deliver numbers that prove his business will make money.

Certainly the third-quarter results, announced on Friday, Oct. 28, did not help his cause. Once again Overstock.com (Research) lost far more than analysts were expecting.

Read full article.

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