Q: Organized meme stock shorting ala GameStop on Well Health? Do you still believe it is not coordinated manipulation? Are there no protections on the TSX to prevent attacks such as this? If a stock is shorted naked, does that prevent it from showing up on the short reports? Do you have insight on how these groups are able to pull this off or at least why this stock is their go-to? Thanks!
5i Research Answer:
We have comments posted now; 19 different brokers were involved in selling today, and there were no large blocks. The short interest in Canada is only 1.1% and in the USA only 0.7%. This is not a big bet against the company. Three downgrades scared investors, and maybe some tax loss selling and profit-taking occurred (it is both well up from its low and well off its high). Brokers are not supposed to short without borrowing first but it can and does happen. Shorts tend to attack companies that have sub $1B market cap and are not widely followed institutionally, with the intention of simply creating uncertainty amongst retail investors.