Companies on the defensive seize upon an aggressive form of shorting
MarketWatch, 14 June 2006
By one contentious estimate, it’s a big problem plaguing more than 10% of stocks on the New York Stock Exchange and Nasdaq. An NYSE probe into whether naked shorting was used to force down shares of Vonage Holdings Corp. VG, +3.53% lower during the Internet phone company’s May initial public offering has added fuel to the fire. See full story.
“There are a group of bad guys rigging the market by selling tens of millions of shares everyday that they don’t own and never deliver.”
— Wes Christian, securities lawyer
Comment: The naked short selling appears to be closer to 50% of the market. The amount stolen is now documented at no less than $100 trillion, with $180 trillion in additional collateral damage (the outright destruction of value).