NorthWest Biotherapeutics Inc (NWBO)

[MalteseFalcon]

Many people wonder how big the naked short position in NWBO is, if there is one at all. Given the 24/7/365 attacks on the company and alleged price manipulation, it appears that the naked short position may be massive. But how big? As naked shorting is illegal there is no easy way of finding out. If it exists, it may possibly be hidden by the ability of the market makers to sell stock they don’t own as part of their duty to keep an orderly market. Finding the data on this is difficult as many of the most active market makers in NWBO are not public and there is no available information. However, Virtu Financial is listed and its annual reports have some interesting information as follows:

2020
Revenue: $2.6bn
Contribution from Market Making: $2.45bn
Financial Instruments Sold Not Yet Purchased: $2.9bn

2022
Revenue: $2.4bn
Contribution from Market Making: $1.8bn
Financial Instruments Sold Not Yet Purchased: $4.2bn

Over the period Virtu had a -26.5% fall in revenue from market making yet increased securities sold but not yet purchased by 44.8%!

To be clear here I am not alleging that Virtu has engaged in naked shorting or has done anything illegal. What I am saying though is that the ability of market makers to sell things they don’t own may hold the key to how a very large naked short position in NWBO may be hidden. If the motion to dismiss the lawsuit against Citadel, Virtu, etc. is denied I reckon that details of NWBO stock these brokers may have sold but not yet delivered will be one of the first items that Cohen Millstein demands during the discovery process.