When I went to the document you referred to about the shorting I didn't find the entire phrase you enclosed in quote marks (not even the very short phrase of "even naked short"), even though I used the internet browser's word search features on the entire document. When I looked at the paragraph you referred to I still didn't see the quoted phrase there though I found wording that was somewhat similar, but the context of the wording gives a very different interpretation than that stated in your post.
It looks to me that what you enclosed in quote marks is a paraphrase that is somewhat inaccurate (and which even sounds misleading to me, but I don't claim to know your intent by the words you quoted). The paragraph in the document says the short selling, including naked short selling, would be for the purpose of stabilizing the stock price, not to increase volatility. Likewise the paragraph says that purchases would also be made to stabilize the stock price. To me, the paragraph seems to be saying the intent is to narrow the stock's trading range over very short time frames, reducing wild fluctuations in stock price, and hence reducing the volatility of the stock price - while the offering is in progress. If the document's paragraph is making sincere statements and if the stated goal is achieved, then that would make FCEL stock less suitable for swing trading while the offering is in progress. The stabilizing spoken of in the paragraph says it is meant to happen only during the days of the offering is in progress - not after the offering is completed.
For the benefit of readers here is the entire last paragraph printed on page S-21 of the document; in the quote below the "..." refers to the portion of the paragraph that continues onto page S-22:
"In connection with this offering, the underwriters may engage in
stabilizing transactions, which involves making bids for, purchasing and/or selling shares of our common stock in the open market for the purpose of preventing or retarding a decline in the
market price of our common stock while this offering is in progress. These stabilizing transactions may include making short
sales of our common stock, which involves the sale by the underwriters of a greater number of shares of our common stock than they are required to purchase in this offering, and purchasing shares of our common stock on the open market to cover positions created by short sales. Short sales may be “covered” shorts, which are short positions in an amount not greater than the underwriters’ option to purchase additional shares referred to above,
or
may
be
“naked”
shorts,
which
are
short
positions
in
excess
of
that
amount.
The
underwriters
may
close
out
any ...".
In posting to this site, it is my primary aim to provide accurate information and good ideas to the readers, for their benefit - and not hype or nonsense or gross exaggerations (except maybe for humor). I hope I achieve that goal.
AI
