Short selling is extremely predatory on low priced stocks On low priced low volume stocks. They have no defence against systematic shorting. Shorting on higher priced well covered stocks I agree does provide liquidity.
But on these junior venture stocks the shorting can quickly turn into extreme price pressure that the companies in many cases struggle to survive and can create higher dilution when financing is required.
I've been talking with the powers that be to stop all shorting on stocks under $2, easy to control, not sure if it will be put in place. For some reason the regulators are very slow to make common sense adjustments to the markets.
Just wrote a post on the TUO board (Teuton) a stock I own, about how futile it is to attempt to graph these junior exploration companies especially if trading at low multiples. TUO would be a good example (due to low volume) how easy it would be to destroy a share price if a shorter was to attack it. I would imagine a well timed short could probably drive that share price down to 50 cents or less due to the low volume that stock attracts. Covering the short would be easy due to the insane panic it would cause. So yes shorting juniors is very predatory.
This is why AMK is very interesting at this stage. As AMK is in the middle of a buyout the 3 million shorts are taking a very big risk as Cunningham could wipe these out very quickly. But as another poster implied is the buyer the shorter ? Lots of games being played, posters on here about to start WW3.
Didn't understand that earlier post about Morningside. Usually that research is only used for dividend paying stocks. Rarely do they have any genuine information for stocks in this sector. Been like that for years and years, not their area of expertise.
Apologise for long post but trying to stay away from this board ha ha ha.
Staying very long and watching and waiting.
JMHO.