In another piece that has me questioning the quality control over at SeekingAlpha, a post titled BIDZ Shareholders Fight Against Alleged Illegal Shorting has appeared on the site.

The post quotes a letter posted on Yahoo! message board by someone claiming to be a former executive at the company, Matthew Mills: "As most you know, I am the former Chief Operation Officer of Bidz. I have maintained a very close relationship with a great number of the original shareholders of Bidz and still hold a sizeable stock position in the company."

In the post, this Mr. Mills fellow discussed plans he was making with "investors are very well known in the investment community, connected to big name law firms coast to coast and have political ties in Washington DC" to sue "naked short sellers" who were driving down the company's share price.



He wrote that "The first step will be to file lawsuits against certain individuals and/or entities who have been involved in the publishing and disseminating negative information as part of the scheme to illegally manipulate Bidz stock."

Right. Not untrue information. Not defamatory information. This man wants to sue people for posting negative information about a stock on the internet. I thought this was America! "Mr. Mills" urges shareholders to contact him at "matthewmills21[at] yahoo.com." Interestingly, someone claiming to be this same Matthew Mills recently urged Bidz shareholders to contact him on a comment on Barron's Tech Trader Daily blog. The email address he gave was matt@intlally.com.

The SeekingAlpha contributor, who disclosed that he had spent $13500 on merchandise from Bidz and is long the stock, wrote that "It would appear that the shareholders are fed up with the current stock price and ready to fight back."

Securities lawyer Howard Sirota of Sirota & Sirota told me by phone that, in his experience, anytime a company starts complaining about naked short sellers, "the underlying company is a fraud."

A few prominent bloggers have raised questions about Bidz.com's business model and accounting. Andrew Left wondered about the company's inventory and accounting, and ex-con turned fraud fighter Sam Antar has opined that the company's accounting is not in compliance with GAAP.

Before talking about lawsuits and conspiracy theories, Bidz shareholders would do well to take a look at some of this research, and remember: Short sellers can't destroy good companies. If there is a naked shorting attack on Bidz.com -- I can't see any evidence that there is -- driving its stock price well below the company's value, where are the competitors making offers for the company?