Bloomberg , 13 March 2007
NEW YORK, March 13 /PRNewswire/ — Tonight BLOOMBERG TELEVISION(R) examines a little-known stock trading practice that can be affecting your portfolio and your company. The special report, titled “Phantom Shares,” explores the problem of “naked shorting” in the stock market. The half-hour BLOOMBERG TELEVISION program is scheduled to air on Tuesday, March 13, 2007 at 7:00, 9:00 and 10:00 p.m. ET.
Every day, millions of shares of stock are sold but can’t be delivered because of an obscure trading practice called “naked short selling.” In a normal short sale, an investor borrows shares and sells them, making a profit if the price falls by replacing the borrowed shares with cheaper ones. In a naked short sale, an investor doesn’t borrow the shares, but sells them anyway. In extreme cases, the investor sells “Phantom Shares,” shares that don’t exist. The BLOOMBERG TELEVISION report, anchored by Mike Schneider, explains this practice, how it’s executed and what the Securities and Exchange Commission is doing in an effort to control it.
According to the BLOOMBERG TELEVISION report, thousands of publicly-traded companies, including high profile brands such as Overstock.com, Delta Airlines, Martha Stewart Living Omnimedia, Trump Hotels and Casino Resorts and Taser International, have been affected by naked short selling.
Tonight’s program features interviews with naked short selling’s highest- profile critic, Overstock.com CEO Patrick Byrne; James Chanos, President of Kynikos Associates who is nicknamed ‘The Dean’ of short sellers; and Peter Chepucavage, a former SEC attorney who helped write the regulations that were meant to battle abusive short selling.