Short exempt refers to a short sale order exempted from the uptick rule regulation, as governed by the Securities and Exchange Commission's (SEC) Regulation SHO. The current implementation of this regulation contains a modified version of what was known as the uptick rule.
I'll explained this so stupid people like me can understand, Master is saying that Market Makers sold about 350,000 shares that they do not have, but sooner or later, they need to find those shares. When they do, ZEV should ZIP right up.
I personally believe Master is a very conservative person, I'd guess that those nefarious MMers sold more than a million shares they do not have, counterfeit shares, if you will.
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