RE: Naked shorts
I have read, from many sources, that a crimp if not outright death blow to shorting in general, and even naked shorting, was for a stock to pay a dividend. The shorts, and/or naked shorts didn't want to be put in the position of having to pony up the cash to pay those dividends to legitimate holders of stocks they had ostensibly "borrowed" to short. If nothing else, naked shorting time frames would be compressed, theoretically, to the time between dividend distributions.
Along that line, I was thinking EVG's Prosperity Spinout would put the shorts in the uncomfortable position of having to rectify that dividend/spinout component and come up with cash. I expected a flush of short sellers and a pop in the share price..
Judging from the rapid decline of EVG's share price, I obviously was incorrect in that assessment.
Cursory reading of some recent posts on this subject lean to the conspiracy theory, as in the shorts are running the casino, so they're not going to police themselves. If that's true, why are we even gambling here?
I'd love to hear some explanations of why shorting/naked shorting seems able to continue indefinitely.