Regardless of how many people short the stock naked, no company will ever go to zero based on short volume. There is not one company in the history of the world that ever did that and it won't start now.
Regarding your thread title........ " Dump!! Dump!! Dump!! b/c of naked shorting. " Personal responsibility is dead. Attitudes like your's are killing America. It always has to be someone else's fault. Face it, you invested in crap companies that earn no money and are drowning in level three debt aka crap. Just hit the sell key and your pain will go away. To the OP, this is for you. ........... http://www.elitetrader.com/vb/showthread.php?s=&threadid=133982
If naked shorting goes unrestricted, common sense is to Dump!! Dump!! Dump!!, and a lack of common sense is to hold on to show your patriotism. Regardless of how strong the balance sheet, if the stock is thinly traded, shorts can & do knock it down, force margin calls & liquidations (to everyone but you), ESPECIALLY when retail traders load up on the stock in the wake of news of a GOOD balance sheet.
While your on the subject,, you should take 25 mins of your time watching this vid: http://video.google.com/videoplay?docid=4490541725797746038 I hope it helps even one person out there.
An allligator doesn't kill on the first bite. He drags you to the bottom. You drown, he Mangias. These guys choke the capital. Tomorrow, I will start a new thread, and show you a survivor that made it. But they're the only ones.
Yeah the shorts will knock it down and the retail investors will scurry out of the stock. Know what happens then? A big fundy institution (like CGM) will come in and buy a ton of stock. That alone will cause the shorting to stop OR a competitor will buy them out at a premium, knocking the hell out of the late shorts while thanking them for allowing such a cheap acquisition.
I haver been shorting... Thanks for the money, see shorts are only bad if you are dumb enough to hold the stocks that are getting shorted. Bad stocks get shorted, you can't bear raid a good stock, it won't work, all that will happen is more buyers will come in. If a stock is worth $10, and for the past 5 years it has been valued at say $50. Then shorts come in (according to you) and knock it down to say $20, and you're complaining cause you bought at $40, and somehow it was because of shorts. If your stock lost money it is because it should have lost money. Which means you should have lost money. Stocks are supposed to go up AND down, not just up.
This does NOT apply if there is an infinite amount of shares available to sell. Someone on ET gave (an extreme) example of an institution trying to short the thing to zero, or it won't happen because someone comes and buys 5 times the available shares, then when he asks for delivery, he gets nothing. Stock prices should be valued based on convential supply & demand, not with artificial supply & demand.