Short Selling Data Short Interest 73 (-96.13%) 01/31/2023 Significant Failures to Deliver No
https://www.otcmarkets.com/stock/GVSI/security Thursday, May 27, 2021 “Naked short selling” is often claimed by struggling public companies to be the source of their woes. But there have been relatively few cases addressing naked short selling.
Small-cap companies are going after naked short sellers in growing numbers: ‘It’s the biggest risk to the health of today’s public markets’
The issue of naked short selling emerges in financial markets with some regularity, and is often raised by small companies with low stock prices. But the practice is relatively rare, and is highly risky, according to market participants.
Short sales are almost never the reason a stock falls, which is caused by long sellers selling, as Ihor Dusaniwsky, head of predictive analytics at finacial analytics firm S3 Partners, has told MarketWatch.
Failure to deliver is critical when discussing naked short selling. When naked short selling occurs, an individual agrees to sell a stock that neither they nor their associated broker possess, and the individual has no way to substantiate their access to such shares. The average individual is incapable of doing this kind of trade. However, an individual working as a proprietary trader for a trading firm and risking their own capital may be able. Though it would be considered illegal to do so, some such individuals or institutions may believe the company they short will go out of business, and thus in a naked short sale they may be able to make a profit with no accountability.
Subsequently, the pending failure to deliver creates what are called "phantom shares" in the marketplace, which may dilute the price of the underlying stock. In other words, the buyer on the other side of such trades may own shares, on paper, which do not actually exist.
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