The naked shorters dumped 2 million Novastar shares into the market in a single transaction on a day when the total issue was only 9 million shares. The price dropped over 40% that day and triggered net worth clauses in a bunch of financing agreements.
Prior to that, the naked short tally was in excess of 300% of the entire issue. How can you even think of mentioning dividends when that kind of crap is going on in the market for your shares?
In the final days of Lehman, there were over 32 million fails to deliver. All of those share sells were used to hammer down the bid. With no uptick rule in place and nobody to stop them, the naked shorters took down LEH like it was grass and they were the lawnmower.
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