I've read this twice, can anyone actually point out where the article links short sellers and share price manipulation?
The closest thing I can see is that the shorts are accused of closing their short position by acquiring shares in a secondary offering, which not only is legal, but also a smart thing to do if you think the offering is priced high and you're short.
I don't blame you, the author miss uses the term short sellers in the beginning then uses it correctly later on. Which is confusing, initially they use the term to mean "any investor selling their shares of stock" which is annoying.
Then later they use it correctly WRT a firm needing to buy the shares they sold back to give them back to the original lender, which I assume in this case is Charles Schwab.
All in all, this article seems like a rough draft and needs to be proof read. I was REALLY critical and had to really focus to squeeze meaning out.
You're supposed to announce an offering so investors are properly informed. If you can just pump up the share price, short it, then cover AFTER the offering has been announced, shareholders are not being properly informed about the offering.
"There’s something about the look on the guys face on the right though. Something that just kinda….rubs you the wrong way..You seeing what I’m seeing?"
This is so weirdly written with all sorts of random asides that makes it hard to take seriously/understand what the point is.
"Bears who only consider the math of the business model as it stands today, either don't understand what makes a good investment or have ulterior motives"
I think it might be a great business model for movie theaters to offer themselves. This would be true especially if their gains from selling subscriptions (and from selling food) outperforms their marginal loss on opening up more shows in theaters. I think the margin loss on opening up shows should be quite low, assuming real estate and buying permission to screen movies be the main cost. I believe the marginal cost of more shows - hiring employees to clean up the seats, manage crowds (including entry / ticket checking), and wear and tear of seats might be relatively lower.
The business model just doesn't make sense if you're buying seats at a high cost from cinema theaters, and selling subscription passes. The trump card here would be to get movie chains to offer unlimited seats on your platform in return for a high percentage of the subscription fee. Negotiation skills matter!
This article is about MoviePass, by the way. I don't blame them for trying it. This same model seems to be working out great for car wash subscriptions.
Apparently a lot more people are willing to squeeze the most possible value out of watching new movies in the theater than out of getting their cars washed, though. In hindsight, it seems obvious that the former has more pull, but maybe this was not as clear before.
I've followed Bitcoin for a while. What seemed to happens there was the deliberate manipulation of the price using all means available (ads, etc.) The result was a few winning big.
I have no reason to believe the same doesn't happen on the real stock market.
The closest thing I can see is that the shorts are accused of closing their short position by acquiring shares in a secondary offering, which not only is legal, but also a smart thing to do if you think the offering is priced high and you're short.