Also check out information with respect to the case filed by hedge funds against prime brokers last year alleging, inter alia, naked shorting, as well as claims made in the Overstock case with respect to paid bash pieces.
OSTK could force a cover at anytime they wanted to. It's very simple. All they have to do is issue a non-trading dividend in a private corp. Like say a new corp called overstock christmas lights. Since any short is required to pay any dividends. A dividend that only can be paid through ownership of the stock will force a cover.
But OSTK does not do anything like that. Why? because they are burning money and need to continue raising capital through stock sales.
The people that are providing this money are the same people that started shorting the stock. In advance of buying the Placement of the stock.Sell it before you buy it and lock profits at no risk. Then other people piled on the shorting and that is when all the law suits started.
It's the market, that's how it works. The herd comes thundering in either long or short when they think they see a sure thing.
Chart the stock, see what happens after the placement is filled?
Overstock.com Raises $40 Million Through Issuance of Common Stock
SALT LAKE CITY, Dec. 15 /PRNewswire-FirstCall/ -- Overstock.com, Inc. (Nasdaq: OSTK) today announced that institutional investors have agreed to purchase 2,734,152 shares of its common stock for $40.0 million at a price of $14.63 per share. WR Hambrecht + Co., LLC served as the placement agent for the offering.
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