fnord, spare me the song and dance.
there were no firms making a market in CMKX stock. The stock traded on an unsolicited quote basis, and all trades consisted of matched retail buys and sells.
That's like saying, "Hey! You can't short pennystocks because they're not marginable securities!" LOL, OK.
No MM had filed a 15-c-2-11, allowing "him" to make a market in the stock, and others to piggyback on him. Under those circumstances it is all but impossible to have a "naked short," as retail brokers won't tolerate a fail to deliver in a retail customer's account and can, using established NSCC proceedures, cure a fail and force delivery within a few days.
Since when does anyone follow "rules" in pennyland? In fact, since when does anyone follow rules in the stock market period? Would we even have an SHO list if anyone did? And you expect me to believe the "yada" you posted above? C'mon now.
As to the NASDAQ bubble, yep, a lot of market cap was lost from the peak of 18 trillion. However, a lot of that market cap was hypothetical.
Huh? You're saying that $18T that was bought and owned with real money, but didn't exist? Or are you just trying to justify the bear raids on companies with "extravagant" P/E ratios? Be honest now.
MM's no doubt made use of their exemption from locate requirements on the sell side, and their exemption from delivery requirements-allowed at the time. However, they also provided price support on the bid side, allowing people who wanted out to get out.
Greeeeat. Just another justification for "providing liquidity". That excuse is getting old. No thanks, I'd rather have large spreads and no fraud. How about you?
There are many, in fact, who argue that artificial constraints on short selling allowed the bubble to inflate. Many sell side firms saw it early on, took short positions, and got mauled when the dumb money kept piling into the market.
No. What happened is these clowns didn't anticipate the amount of longside capital that would flow into the markets after the advent of "online trading". So many of these clowns got stuck on "old principles of valuation" and got served when the market decided to value companies at 10x what they used to be.
VALUATION IS SUBJECTIVE.
If shorting became too risky in the late 90s, then they should've went long instead of short. Don't create shares out of thin air simply because you felt a stock was overvalued and couldn't borrow enough to try to correct your poor decision.
Don't give me the BS excuse that "dumb money" deserved to get their pockets reamed because a few guys on Wall St. couldn't keep up with the times.
There were NO Palm shares available to short after its much hyped IPO, allowing a mispricing of Palm against 3COM to persist for months due to the inability to arbitrage the price relationship to the proper levels.
Again, you have the classic shortseller approach to this. You think you are the "almighty" when it comes to valuing things. Problem is, you're not. The market changed and you couldn't keep up.
Let supply and demand determine value, not you.
AI
