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Fashion Company SQBG Tries To Crush Shorts, Force Squeeze After Chairman Urges Investors To Pull Borrow
Last Thursday, in a move which we had expected would happen, KaloBios new CEO Martin Shkreli gave shorts in KBIO a "thanksgiving present" when he announced he would stop lending out his 70% block of KBIO shares, thus making shorting virtually impossible and forcing a short squeeze, one which sent the stock up over 100% the next day.
It appears the idea of withdrawing one's borrow has spread to other troubled companies, and moments ago in a very surprising statement, the Chairman of small-cap fashion company, Sequential Brands Group (SQBG), William Sweedler issued the following statement today "with respect to the recent volatility in the Company’s stock price", by which we assume meant the 10% intraday slide in the company's price.
“Tengram Capital Partners, as the largest shareholder of the Company, has been closely monitoring the significant decline in the Company’s stock price and associated increase in trading volume. We believe this decline in stock price and related increase in volume is being driven primarily by short sellers. The Securities and Exchange Commission only permits this activity if the short sellers have access to shares that may be borrowed to cover their positions. What you may not know is that you, as a stockholder of the Company, may be facilitating the ability of these short sellers to create these positions by permitting your shares to be borrowed.
The problem, however, is that unlike KBIO, Tengram owns a modest 16% of the company and hardly enough to cause a panic short covering burst in the stock, which according to Bloomberg has 9% of its float shorted.
As a result the Chairman had no choice but to ask every other investor in the company to do the same, and force the kind of squeeze witnessed in KBIO (and of course Volkswagen):
"Tengram has instructed its broker that it will not permit borrowing of any of its shares by short sellers who are only interested in reducing the value of the Company’s stock price for their short-term gain. We urge each of you to contact your broker today and inform them that your shares may not be made available to be borrowed by short sellers.”
In other words, the war against shorts takes on a new form, one where executives and investors are pulling borrow, making naked shorting virtually impossible, and hoping to technically trap shorts and force a short squeeze.
It remains to be seen if they will succeed, although for now the SQBG price has returned back to opening levels...
... although we are confident that as more and more companies try the "Shrekli" angle, many more squeezes among some of the most troubled public companies will become the norm, leading to even more pain for those who are short them, just as we predicted a week ago. At least until the SEC and Finra have something to say about this practice.
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Shorting a manipulated market means you are stupid, unless you get the scoop from the Juice inside the FED.
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All stock shareholders that comply with the request need to be prosecuted under anti-trust laws for PRICE FIXING and the CEOs need to be prosecuted and jailed for conspiracy to fix the price.
I am not holding my breath. Since when do the laws really matter?
The people over at the SEC will continue to masterbate while looking at queer porn...on the taxpayer dime.
Very clear that it is time to short sell the entire market from these idiotic short squeeze developments. Short selling is the new joy in fuckign the entire market for 2016.
2008 was an interesting time. If you dig around, you may be able to find a YouTube of the interview with Hank Paulson and Ben Bernanke when they arranged to have short selling halted in Freddie and Fannie. Might have included the TBTFs too.
how dare they disallow stock rehypothecation!!
So, if I buy a stock, from a short seller...can my now owned stock, be borrowed by another short seller?
you realize, short selling creates a ficticious new supply of shares...
Too funny... I can't wait to see the major shareholders colluding to short their own shares, in an Un-naked way.
Why would the rats want to stay on a sinking ship, if they're given a lifeboat from the captain of the sinking ship?
The youts don't have $800 for a pair of pants and everybody knows it now. Happy Kwanza !
Flash mob over at SBGwhatever.
Happier Kwanzaa
The problem with shorting these types is when they get halted, you may never see your money back.
naked shorting should be illegal. all those brokers who lend out people's shares without them knowing it are criminals against their own clients.
Naked shorting is illegal.
A short where someone actually borrows a real share and sells it IS NOT A NAKED SHORT. The borrower must replace the share at the expiry of the contract. He does so by purchasing a share of the stock...and returning the share.
You sign a contract with your broker. Yes he can, and will, loan out "YOUR SHARES", (actually those shares are owned by Cede and Company and are not in your name although you are led to believe that they are), and if you do not instruct your broker to the contrary then the shares are elegible to be loaned.
A refusal by your broker to ask permission to loan "YOUR SHARES" is what needs to be illegal. It is selling someone else's property without their knowledge. That is considered a theft in most jurisdictions...except the Stock Markets...who routinely get away with it because you really do not own any shares of stock that you have purchased.
Your broker will dissuade you from placing the ownership of shares in your name, rather than in Cede and Company's name. They are more liquid if they are in Cede and Company's name.
Even your title to your home, if you should be so unfortunate to be paying a mortgage, is in the name of Cede and Company...who owns roughly 98% of Global Assets.
With the creation of the Mortgage Backed Securities the ownership of property becomes real fuzzy. You may have thought that your mortgage payments were going to the correct lender. But you may not have been. Thus another lender, demonstrating ownership, can foreclose. Those MBS are also owned by Cede and Company. And your mortgage was packaged and rehypothecated so many times...
Now you can sue your Title Insurance Company. But when it all unravels, and that will happen quicker than you think, and much slower than I thought, you can stand in line suiing your bankrupted Title Insurance Comapny, and be left homeless as what you thought you paid for does not belong to you.
They are an actual company with a physical brick and mortar address. Now the shareholders of Cede and Company are the real players and are allowing your participation in any paper market.
And those shareholders are the real rulers of the World.
ALL OF IT IS A FRAUD. ALL OF IT. You had best wake up.
I follow one...LXRP. There are twenty days a month with failure to delivers...it adds up to like 11 millions shares over the past few years which is more than the publicly tradable float. How do naked short sellers get away with it? Isn't it like counterfeiting?
the Madoff exemption
Yes, it is like counterfeiting, but it is legal for market makers.
EDIT: Should have said "options market makers".
http://globaleconomicwarfare.com/2012/07/madoffs-crime-of-staying-naked-...
I even read the SEC committee transcript for that meeting several years ago. I thought it was outrageous that the SEC went along with the Madoffs and did not plug that gaping hole. It seemed like the Madoffs were talking circles around their regulators.
The SEC and FINRA should become more energized over Treasury FTDs than efforts to protect the value of an equity by true owners.
http://www.dtcc.com/charts/daily-total-us-treasury-trade-fails
Engineered squeeze on the shorts.
The new investing paradigm by which the big boys give a financial wedgie to the not-quite-so-big boys. And make even more money by going long before they trigger it.
Gonna get real popular real soon. The ultimate insider trade.
Will the broker allow you to withdraw your shares for shorting for just one issue?
If you withdraw your rehypothecation agreement, doesn't that mean that you also cannot short anything?