The Latest Way To Fight Shorts: Issuing Stock Certificates

by: Mick Weinstein

Excerpt from our One Page Annotated Wall Street Journal Summary (receive it by email every morning by signing up here):

TRACKING THE NUMBERS: 'Not MY Stock': The Latest Way To Fight Shorts

  • Summary: In an effort to fight back against short sellers who they claim are manipulating their stock, executives at a number of small companies have requested that shareholders demand physical copies of stock certificates. Their hope: Brokers will no longer be able to lend out shares for orders to sell short, and existing shorts will be forced to cover, triggering a short squeeze. The companies include Rx Processing, Sedona, NewMarket Tech and Riverbank Investments -- all traded OTC or on the Pink Sheets -- yet so far they haven't succeeded in convincing many shareholders to do so. This is the latest effort among companies whose stock has fallen sharply amidst large short interest to confront the shorts as the source of the problem; executives from Overstock and Fairfax Financial Holdings have filed lawsuits, launched private investigations and begun publicity campaigns with that aim.
  • Comment on related stocks/ETFs: Greg Newton recently commented on the Fairfax case, noting the shorts have new reasons to believe they're right. The ongoing Overstock drama, marked by the bizarre behavior of CEO Patrick Byrne, is summarized here and here. Dylan Wetherill comments each week on stocks at risk of a short squeeze, and if you are interested in following all 'short ideas' by our contributors, check out that category.