Royale Energy's (NASDAQ:ROYL) management team did it all right. It conservatively and effectively managed the company in Q1 - increasing cash flow by 55%. The market responded with a 52 week high. After the annual stockholder meeting, the company promised to return to profitability - another 52 week high. Its accomplishments were acknowledged, and the company was added to the Russell 2000. Most importantly, it significantly exceeded Q2 expectations (see 10Q).
The reward - Royale has been added to the top of the naked short list. Many factors (i.e. oil, market, etc...) affect Royale's stock price. However, I have personally watched market makers systematically drive down the company's share price. Something is fundamentally wrong here. Numerous investors have been driven out of their positions via naked short selling - forcing margin calls; triggering stop loss orders; and flat out scaring many out of the stock. Complaints to the SEC have gone ignored, and many individuals understand first hand they are not playing on a level playing field.
The real irony is small, well managed companies are targeted. The individual investor in America is going to become extinct unless we clean up trading practices and start enforcing laws that are already on the books. The SEC needs to start prosecuting those involved in illegal manipulation of stocks. It also needs to take a close look at the value of naked short selling