Bruce - several things
First, an apology. The sentence of insult in that post was unnecessary and uncalled for. It added nothing to the points being made. Shouldn't have typed it. Period. I apologize.
Second, I happen to agree with you, more regulation and disclosure is needed to ensure a fair and level playing field. Transparency is good.
Third, I understand you may disagree, but I do believe you'd benefit much more by learning more about how markets are actually made rather than digging in your heels further. I wasn't trying to insult you, but it was my opinion (and obviously that of someone else who responded to you) that your post indicated less than a full understanding of how markets are made. While I appreciate you asking, I cannot be your tutor. Nor am I interested in a "debate". In fact, I mean it sincerely, not snidely, I believe if you'd invested as much time in financial analysis of Novastar as you have in parrying on message boards, you might have saved yourself unnecessary losses. And I really and truly wish for your own sake that rather than trying to blame external factors for losses, that you'd review things, and look the other direction.
Fourth, regarding your protest that you were sold "fluff". Ask for the shares to be delivered and they will be.
Fifth, suggest you read what Buffett and others have said about short selling. People who've made good investments, welcome it. Because bottom line, if you're talking about a company that is liquid, that has an acceptably strong balance sheet and cash flow, the market will always find the appropriate level over time. Yes, it is possible to "drive down" a company's share price by temporarily unbalancing supply and demand at price levels. But that is unsustainable to the degree it diverges from the fundamental value of the underlying business. The further the market value diverges beneath the fundamental business value, the greater the chance of a takeover.
Put yourself in the shoes of a hedge fund manager. Let's say you looked at a business whose shares traded at $40/shr. Let's say you thought the franchise was worth $35/shr. Let's assume nefarious market forces would permit you to "artificially" drive the share price down to $15/shr. Would you? Doubtful. Because free markets operating as they do, for every dollar you pushed beneath $35, the chances of you getting run over in a bull stampede increases. Worse, so do the chances of waking up one morning to news of a hostile takeover bid.
Take SNDK. Would you, as a hedge fund manager, want to have been trying to squeeze an extra $2-$3 out of the short side from $15? Knowing you could wake up one day and find a $26 offer on the table from Samsung? Of course not! And hedge fund managers who do do that kind of stuff don't last long. They blow up and are gone. The boring truth is, most hedge fund managers do tremendous amounts of due diligence, and for the short portion of their portfolios (interesting how nobody seems to care about what they're long, and whether they're artificially inflating prices of their long holdings by walking them up!) ad gradually to their positions, want not to drive the price down, but to avoid that, so they can continue to ad at higher prices not lower ones. Yes, when price action cracks, it tends to do so on bad news that confirms their thesis, at which point they are trying to increase their bet, in volume. Just as happens on the long side on the way up, following confirmatory good news. This isn't nefarious, it's perfectly normal.
Again, I'm sorry about Novastar. 4 years ago I did due diligence on that and concluded the shorts were correct in their assessment that it had crappy management, and a fundamentally flawed business model that would eat them alive one day when the credit bubble burst. More importantly, it was hard to see how anyone who'd done the financial analysis could possibly want to buy it.
In the future, when you see a company with leverage in the business model many multiples of operating margins, operating as a second- or third-tier player in their field, where the field itself is dangerously cyclical and in a historical boom phase, with management that is regarded as below par by a great many smart market observants, is paying a dividend more than 1,000 basis points above the risk-free rate, and is increasingly heavily shorted, this should be a sign not that you can get "easy money" from that dividend, but should set alarms going off in your head. More than 1,000 points above the risk-free rate is telling you something. So is the growing accumulation of shorts. It is the height of arrogance (and foolishness) to conclude that the guys on the other side of the trade are all fools and just don't understand the brilliance of the long case. Even worse to conclude that they think the company's really worth much more than it's trading for, but are shorting it simply because they think they can artificially move the price even further beneath it's true value. (You ought to ask yourself the question of whether given an equal amount of time and money, it'd be easier for them to artificially move the price up or down - and why they'd pick the direction they did).
Here's the thing, Bruce, even if more shares of Novastar had been shorted than existed, that only serves to obscure the bigger problem with an investment in Novastar and the real reason Novastar investors lost their shirts. Even if you concede the point that short sellers could influence or impact the near-term share price for day-to-day trading, they cannot touch the underlying business (unless the business is upside down, needs to raise capital to stay alive, and the ability to re-capitalize or maintain debt is tied to the stock price -- in which case, an investor should know that going in, and if they believe there's the slightest chance a nefarious "attack" could permanently cripple the shares, should simply move on -- knowing the sensible and rational thing to do is play the world as it is, not as one wishes it was). And that is the key on Novastar. It's business operations weren't devalued by short sellers. It's business operations and their value were impacted by how the business was run and managed and what its real value was in the marketplace. Period. If that business was worth substantially more than its current $15m market cap, it would be bought up in a heartbeat. It's not. And therein lies the real problem.
Again, take this for what it's worth, discard it as insulting, misguided, or simply off-base, if you like. But not insincerely offered. I genuinely don't like seeing anyone lose their shirt investing in something like Novastar. Particularly not nice, decent people, which you seem like. My (admittedly unsolicited, but very sincere) advice is this: the best thing you can do for yourself here is to recognize that blaming naked shorts for having made a fundamentally poor investment only distracts you from acknowledging what really went wrong, and how it can be avoided in the future. You paid some tuition in the school of hard knocks. It would a shame if you didn't take away the sort of knowledge that would keep you from suffering that again. Rather than digging in your heels trying to blame poor performance elsewhere in your portfolio on a conspiracy of shady forces, maybe consider you've simply made some mistakes and get the heck out of them while they're minor and the losses manageable rather than "defending" them while they burn to the ground.
AI
Market Data 
Markets 
