How does stopping naked short selling help ? Stopping naked short selling can benefit a stock in several ways. When a stock is naked shorted, it can result in an oversupply of shares in the market, which can drive down the price of the stock. This can harm the company and its investors, as it can make it more difficult for the company to raise capital and can reduce the value of existing shares.
Stopping naked short selling can help to reduce the supply of shares in the market and can lead to a more accurate valuation of the stock. This can make it easier for the company to raise capital, as investors may be more willing to purchase shares at a fair price. It can also benefit existing shareholders, as the value of their shares may increase as a result of a more accurate valuation of the company.
Additionally, stopping naked short selling can help to promote market integrity and prevent fraudulent or manipulative trading practices. Naked short selling can be used to manipulate the price of a stock and can be part of larger fraudulent schemes, so eliminating this practice can help to prevent these types of abuses.
Overall, stopping naked short selling can help to promote a more fair and accurate market valuation of a stock, can benefit the company and its investors, and can promote market integrity.