If you enjoy following the nakedshort-selling "scandal," you absolutely must bookmark Gary Weiss's blog. He tracks the ongoing shenanigans surrounding Overstock.com Inc. (NASDAQ: OSTK), which he referred to this morning as a "fascinating slow-mo corporate train wreck." You can also read his commentary on lesser-known but still interesting market scandals.
On Monday he wrote about CMKM Diamonds, a little-known penny stock that blamed its precipitous decline on naked short-selling. Its shareholders bought the explanation wholesale, and some even went to New York and Washington to stage loony protests against the evils of naked short-selling. Turns out it wasn't naked shorts after all. It was the company's dishonest management, which is currently being sued by new management for fraud and "looting" the company. They sold over $200 million in stock to the public, but almost none of it went to the company.
This is a great example of the tactic of diversion in action. Corporate criminals will often toss red herrings to divert the public's attention from their own misdeeds and poor management. Blaming naked short-selling seems to be the diversionary tactic du jour, and investors should probably head for the hills anytime a company complains about it.
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Reader Comments (Page 1 of 1)
5-04-2007 @ 9:25PM
john444 said...
Idiot,
Nevermind your dismissive tone, the naked short selling problem facing this country is no longer a matter of debate. Only shills paid by the broker/hedge fund interests embarrassingly deny the fact. This dirty little secret is no more and there is finally momentum building to bring the criminals to justice. No doubt there are companies exploiting this issue in an attempt to cover their own behinds, but don't dismiss this problem as a "red herring." It ain't.
5-09-2007 @ 2:48PM
CMKX_ROCKS said...
This block totally sucks. everyone knows CMKX is the Biggest Diamond find in Canada, kicked debeers butt out of the area!, has one million bashers, Jef brokerage admitted to billions in naked shorted shares. and had a FBI Task Force count up all the shares. Notice etrade hand delivered stock certificates to the task force after they thought they were above the law. lol
Notice the DTCC Quicklt changed over to no more stock certificates in physical form to hide their criminal failed to delivers. Only electronic form?
crooks are you guys bashing a real problem. you wipe!
5-10-2007 @ 1:03AM
Youhavetobekiddingme said...
Weiss's blog is lame, pseudo journalism at its worst. Read Weiss's blog only if you want to become ignorant to the truth. Either Weiss is a fool or he is on someones payroll. Only people green to the market or people that believe Fox News is good reporting would like his blog.