Whenever I read about companies claiming abuse by short sellers, I'm reminded
of a fellow named Altamare and his company Universal Express. This was a company that arranged to transport luggage for travelers so they wouldn't have to be bothered. It supposedly was making a wide range of acquisitions (stock purchases), becoming a sort of conglomerate.
Altamare got mentions in Forbes etc as a crusader against naked short selling. Kept hounding the SEC to do something about the abuses -- very publicly criticized the SEC. The guy was actually very charming, sincere-sounding, apparently ex-Marine, etc.
His company had what looked like a solvent balance sheet (in summary), bolstered by a very large 'soon-to-be-collected' judgment against a naked shorter or something of the sort. Turns out the judgment was against a guy who was actually doing time with Altamonte's partner - the company filed a huge claim which the long-time inmate never contested, and when Altomare got the judgment by default the company booked that 'valid claim' as an asset. Meanwhile, Altamonte kept issuing unregistered shares. In any event, the shorts were right. I believe Altamonte later did time himself for looting the company.
I'm sure there may be example of legitimate companies that have been victims of nefarious shorts. Some of those may even be undeserving of the abuse, who knows. But the best defense against that is having a viable business in the first place. It's the 'story' businesses that can get slammed.
of a fellow named Altamare and his company Universal Express. This was a company that arranged to transport luggage for travelers so they wouldn't have to be bothered. It supposedly was making a wide range of acquisitions (stock purchases), becoming a sort of conglomerate.
Altamare got mentions in Forbes etc as a crusader against naked short selling. Kept hounding the SEC to do something about the abuses -- very publicly criticized the SEC. The guy was actually very charming, sincere-sounding, apparently ex-Marine, etc.
His company had what looked like a solvent balance sheet (in summary), bolstered by a very large 'soon-to-be-collected' judgment against a naked shorter or something of the sort. Turns out the judgment was against a guy who was actually doing time with Altamonte's partner - the company filed a huge claim which the long-time inmate never contested, and when Altomare got the judgment by default the company booked that 'valid claim' as an asset. Meanwhile, Altamonte kept issuing unregistered shares. In any event, the shorts were right. I believe Altamonte later did time himself for looting the company.
I'm sure there may be example of legitimate companies that have been victims of nefarious shorts. Some of those may even be undeserving of the abuse, who knows. But the best defense against that is having a viable business in the first place. It's the 'story' businesses that can get slammed.
