Your joking, right? Sub pennies, particular those very low in the trips, are the prime target. I have a couple of fliers in my account that were shorted to no bid. Can I prove that? Nope, and neither can you. But it exists. You and I cannot do it, but off shore hedge funds and those big boys banks who own the MM sure can. Easy money for them. In fact, if they can naked short a company out of business, you don’t have the cover the trades, ever. That is the ultimate goal. All free money for them.
15 years ago the SEC denied naked shorting, the evil brother of shorting, even existed. Now they have laws to protect against it. Crazy huh?
Look at Overstock.com. NSS almost to death. Probably the most public example. Read the articles from the CEO Patrick Byrne. If I remember the story right, he had all the shares in cert form in his desk, yet the stock traded daily, all naked shorting and almost took him out of business as the PPS crashed and he no longer could get bank loans and keep the doors open. He won the lawsuit from a major Wall Street bank, I forget which one.
Look up CMKX. Traded over a billion shares a day for several weeks over several months while the shareholders did a cert pull. The company had a horrible AS of 800B trying to stay ahead of losing the majority ownership. But it was NSS into the trillions. Some big players were involved with the company, like Robert Maheu, and Roger Glenn, but it folded regardless.
Denying the big boys can target a stock for destruction is turning you head to the obvious IMO. I am certainly not saying that is the issue here, it’s just that you will never convince me that no one can short or naked short a stock.
