Naked Short Selling The illegal practice of naked short selling exists when the short sellers try to overwhelm the company by making shares of stock they do not own. Legal short seller borrow stock to deliver when they make their short sales. The naked short sellers flood the market with sales and do not deliver or make some shift to get around the delivery rules. Conventional wisdom says if the company is any good, it will survived a short sale attack, so how do illegal short sellers destroy worthy companies? If the company is in the development stage, it needs to raise money to survive. Typically, this will be done with issuing and selling more stock. The lower the stock price, the more stock has to be sold and the weaker the company becomes. If the naked short seller can push the price down far enough, he can kill the company by choking off new stock sales. When the company dies, he profits 100%. We recently formed Short Stoppers, Inc. to attack illegal short sellers and help their victims. For more information, get a copy of my report, How the Shorts Raid Your Stock, Destroy Your Company and What to Do About It. What you should know is that the naked short is in a dangerous position. He may be short many times the float, even many times the authorized amount of stock. If the stock goes up, he will lose everything. He must destroy the company to survive. No weapon, no crime is off the table. This is why the more the company struggles and does new things to move forward, the more violent the efforts of the short seller to kill it. It is a life and death struggle between a well financed, smart group of financial predators and teams of overworked, underpaid under-financed and ignorant of the ways of Wall Street company entrepreneurs. Nowhere is this fight so evident as with what is known as “cellar boxing.”
Cellar Boxing Cellar boxing is a form of naked short selling. If a short seller can push the stock into the “cellar” of $0.0001 price per share, then a bid and ask of $0.0001 to $0.0002 represents a 100% markup on any stock bought on the bid and sold at the offering. If the price is no bid to $.0001 offer, the spread is infinitely large. How does cellar boxing occur? First, the short sellers, who may be market makers, push the price into the cellar. When and if the company gets wise and tries to do a reverse split, the stock is smashed hard back to the cellar. Investors soon lose heart. This is a classic “bear raid.” Scare the holders into selling by selling aggressively. As the naked shorts are short a ton of stock, they have to kill the company or face disastrous losses and capital calls. They use smear and scare tactics, they use slander by paid “Internet bashers” to kill the company. As the company usually does not realize that it is in a life or death struggle, it dies. So beware of buying a stock that has been cellar boxed or otherwise naked shorted. This is a stock that claims to have been cellar boxed. Here is the five year overview:
In the meantime, every time the company booked a contract and announced it, someone called up the company's customer to slander the company and harass the customer until the order was canceled. Has This Happened to You? If you suspect you have been the victim of naked short sellers, if your company has been slandered by those seeking to destroy your stock, if you have been cellar boxed, call us now!
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