May 4, 2009
-I have represented many public issuers over a ten year career to the investment community.
I have seen companies bids fall below certain prices days or minutes before closing capital raises with BD's that have market making abilities forcing companies to renegotiate causing them to have to take very detrimental terms. I have use the term death spiral financing.
There are many reasons to short a stock, company is over priced by a multiple or exposed to economic factors that will erode the growth or earnings. That is what short selling is for not manipulating the price witch it is most commonly used for.
I not going to write a book, I think the guild lines (not rules because they are not enforced) that we have used for over seventy years are perfect. We do not need to change them, just enforce them Make firms deliver in three days not transfer the short to their buddies firm down the street or firms transferring restricted securities over seas and selling them. If I can see this happening, I cant believe the SEC cant.
Just enforce what we have, let President Obama keep his change
Thank you for reading I would enjoy discussing this in more depth