Admittedly, it's a lot to read. I saved it to reread.
Public agency that it is, the SEC invited pro and con commentary re: it proposed revisions to "fail to deliver" situations.
Basically, a "fail to deliver" is a situation in which a short seller learns he's out of the money and obviously must deliver the borrowed shares and take his losses or put up more equity. Well, if he's tapped out, he can either borrow equtiy to make good on the loss or, and this is where the term "naked" applies, he borrows even more shares in an attempt to force down the price. If he gets lucky and the price tanks he's sitting on a significant exposure to even greater losses, however, he is also enjoying a nice profit from which he can take small slices from time to time without rocking the volatility boat too much.
There were, of course, comments supporting the status quo. IMO, it amounted to so much whining about somebody sitting on a nice paper profit for an extended time period, which, in some instances, comes to years so why should they have to cover.
Some companies, public or private, deserve to fail. That's capitalism. Nevertheless, some companies that have suffered significant damage do recover and prosper. Such a company's reputation among shareholders and lenders should improve. Unfortunately, participants with large short positions will persistently disseminate negative, misleading and patently false information with the intent of arousing fear and caution among current and potential shareholders, lenders, clients, customers, vendors, etc.
The motive, of course, is to protect the paper profits.
That drive back from South Carolina this morning apparently was relaxing.
News 
Market Data 
Discover 
AI
