Comment Re:"This one guy" caused the stock boom? (Score 1, Insightful) 31
...This is not some fantasy and contrary to your claims it's a tactic used by short sellers to increase profit. They do suggest in this article it's also to protect investors but I suspect altruistic short selling is virtually non-existent in reality.
I mostly disagree with your assessment, but this sentence is gold.
...Then there's naked short selling where you're shorting more shares an actually exist which hugely distorts the price as without true supply demand price discovery doesn't exist.
In the electronic era, a little bit of naked shorting does still exist, partially due to code bugs similar to the one that cost Goldman a $3MM fine this spring. But naked shorts are easy for regulators to detect. Naked shorting is just not in volumes significant enough to affect market price. At least for companies worth writing about -- i.e. with nontrivial market capitalization, outside the "pink sheets" / penny stocks which are the apparent focus of cellar boxing (which I had not heard of, because I have never dealt with companies whose price is close to 0.0001).