Companies Fight Back Against Market Manipulation and Illegal Short Selling; Here are Four Stocks in the News
ATLANTA, Feb. 08, 2023 (GLOBE NEWSWIRE) -- A growing number of small-cap companies are announcing plans to go after naked short sellers, claiming their stocks are being artificially depressed by illegal trading activity.
Short selling is a legal practice where an investor borrows shares from someone else, hoping the stock will fall. When this happens, the shares are bought cheaper and returned to the original owner. On the other hand, naked short selling is illegal under Securities and Exchange Commission rules. Still, many CEOs claim the fact that naked short selling is illegal has yet to stop the procedure, which could impact far more companies than is generally known. The illegal practice of naked shorting implies more short pressure on a stock than the number of shares available for trading.
Last February, Bloomberg reported that the U.S. Justice Department was collecting information on dozens of investment firms and researchers engaged in short selling as part of a hunt for potential trading abuses. A new spike in alleged naked short selling among microcap stocks is making several management teams angry enough to threaten legal action. Numerous CEOs and corporate Boards have recently alleged these illegal practices continue and have vowed to take up the fight themselves. By aligning with third-party vendors who specialize in gathering and analyzing shareholder trading and examining equity flows, smaller companies now have the ability to reveal suspicious and unusual trading activity.
Companies like Genius Group Limited (NYSE:GNS), Helbiz, Inc. (NASDAQ:HLBZ), CannaPharmaRx, Inc. (OTC:CPMD) and Verb Technology Company, Inc. (NASDAQ:VERB) have started the proactive process of establishing task forces and investigative activity. In some cases, these findings have been turned over to legal firms or authorities to take appropriate action. The result has been a large increase in activity and positive trading momentum for these companies.
Genius Group Limited (NYSE:GNS) led by its Chief Executive Officer, Roger Hamilton, has been one of the leaders of the charge against naked short sellers. Genius Group is developing an entrepreneur education system that focuses on a student-centered, life-long learning curriculum that prepares students with the leadership, entrepreneurial, and life skills to succeed today. The group has a group user base of 4.3 million users in 200 countries, ranging from ages 0 to 100.
At its January 18, 2023 Board meeting, Genius Group announced its Board approved an action plan to address alleged illegal short selling of its stock. Since then, shares of GNS have traded up from $0.54 to a high of $7.99 on February 2, 2023. This action plan included creating an Illegal Trading Task Force led by Timothy Murphy, a Genius Group Director and former Deputy Director of the F.B.I. The task force is actively pursuing the discovery and prosecution of persons engaging in market manipulation of Genius Group. The company recently announced a spin-off of its Entrepreneur Resorts Ltd, a dual listing on the Upstream Exchange, and a $10 per share NFT coupon. More information on Genius Group is available on its website at https://www.geniusgroup.net.
Helbiz (NASDAQ:HLBZ) offers consumers a diverse fleet of e-scooters, e-bicycles, and e-mopeds through one convenient and user-friendly platform. After its acquisition of California-based Wheels, Helbiz has more than 65 licenses in cities worldwide. The company's management team draws its experience from successful companies like Microsoft, Uber, Airbnb, Tesla, Oracle, and Goldman Sachs. Helbiz is expanding its urban lifestyle products and services to include live streaming services, food delivery, and financial services available through its mobile app in cities around the globe.
On January 20, 2023 Helbiz announced that its Board of Directors had begun examining measures to address its stock's alleged illegal short-selling. Three days later, Helbiz announced it had hired ShareIntel - Shareholder Intelligence Services, LLC to utilize its patented process called DRIL-Down™ to proactively track shareholder ownership, identify parties to suspicious, aberrant, or unusual trading activity, and deploy corrective action steps. The price of Helbiz shares posted an almost five-fold increase over the next few days from its closing price of $0.123 on January 19, 2023 to a high of $0.5540 on January 24, 2023. More information on Helbiz is available on its website at https://helbiz.com.
CannaPharmaRx (OTC:CPMD) acquires and develops state-of-the-art cannabis grow facilities in Canada. By utilizing the latest technology in combined heat and power generation, CannaPharmaRx intends to become a leader in the high quality and low-cost production of cannabis. In 2022 CannaPharmaRx finalized a long-term lease on its Cremona-Area Alberta Facility, acquired key strains to enhance its product portfolio, negotiated an $8 million to $12 million offtake agreement with Spring Medical Group, and received its Health Canada cultivation license and Canada Revenue Agency license. This license allows CannaPharmaRx to grow cannabis legally and sell its crop to other licensed producers and wholesalers. For 2023 CannaPharmaRx expects to execute non-dilutive funding, close a financial platform acquisition, and accelerate its E-commerce applications. The company plans to complete its first harvest during Q1 2023 and additional offtake agreements in multiple countries, allowing it to produce and deliver at an annual run rate of nearly $30 million.
On February 1, 2023, CannaPharmaRx announced that its Board of Directors would be reviewing options for examining and evaluating measures to address the unusual trading activity of the company's stock. The company believes that certain individuals and companies may have engaged in naked short selling practices and other manipulative actions that have artificially lowered the stock price. CannaPharmaRx plans to follow other publicly traded companies' blueprints and develop a comprehensive plan and task force to investigate. Shares of CannaPharmaRx were trading at $0.015 on February 1, 2023 when the company made this announcement. Its shares are unchanged in subsequent trading sessions but could potentially benefit. More information on CannaPharmaRx is available on its website at https://www.cannapharmarx.com.
Verb Technology Company, Inc. (NASDAQ:VERB) transforms how businesses attract and engage customers with its interactive video-based sales applications. Its MARKET.live platform is a multi-vendor, multi-presenter, livestream social shopping destination at the forefront of the convergence of e-commerce and entertainment, where hundreds of retailers, brands, creators, and influencers can monetize their base of fans and followers across social media channels. Verb Technology's Software-as-a-Service (SaaS) platform is a suite of sales enablement business software products offered on a subscription basis. Hundreds of thousands of people use its software applications in over 100 countries and more than 48 languages.
On January 23, 2023 Verb Technology Company announced that its board of directors was examining measures to address the alleged illegal short selling of its stock, among other suspected trading violations. The Company said it believes certain individuals and companies may have engaged in illegal trading activities, including, among other things, naked short selling and spoofing that may have artificially depressed its stock price. As VERB's board contemplates the formulation of a comprehensive plan of action to address this activity, the board is evaluating several options, including the engagement of forensic experts, as well as working in collaboration with other listed companies and their counsel that have identified similar unusual and perhaps illicit trading activity in their shares. Verb Technology shares traded up to $0.58 on January 23 from the previous close of $0.229 on more than 100 times the average trading volume. Taking advantage of the increased interest, Verb Technology closed a $7.2 million underwritten public offering through Aegis Capital Corp., paid off its senior secured debt, and canceled its equity line of credit. More information on Verb Technology Company is available on its website at https://www.verb.tech.
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