
Naked Shorting In The Uber IPO: It Couldn’t Happen On A Blockchain
A curious thing happened during Uber’s troubled initial public offering last week: naked short selling of UBER shares by the banks involved in placing Uber’s IPO, according to several sources who confirmed this to CNBC.
Normally, naked short selling is illegal. But it was legal in this case, and it gave the banks a chance to profit–as investors lost money–when the IPO traded down 18% in its first two days (see here, hereand here).
What’s the rub? Naked-shorting of IPOs by banks, which the SEC green-lighted as recently as 2015, has changed IPO market dynamics by altering the relative power between banks, issuers and investors. To the detriment of investors, banks now have less fear of incurring major losses from pricing an IPO too high because banks now have a tool (naked shorting) to protect their downside risk.
To continue reading, please click here.
Bitcoin/blockchain, ex-Wyoming Blockchain Task Force, 22-year Wall Street veteran.
Disclaimer
This web site is limited to the dissemination of general information, investment-related information, publications, and links.
Please consult important additional information and qualifications HERE.
View Privacy Policy and Terms of Use
Connect with me on Social Media
Search Posts
Categories
Recent Posts
- An Update from Wyoming November 20, 2019
- The Real Story Of The Repo Market Meltdown, And What It Means For Bitcoin September 23, 2019
- WyoHackathon 2019 Takeaways: Kids Rule, Hardware Wallets Fly and Wyoming Wins September 23, 2019
- Facebook’s Cryptocurrency, Libra: Senate Banking Testimony July 15, 2019
- Bitcoin, The Dollar And Facebook’s Cryptocurrency: Price Volatility Versus Systemic Volatility June 29, 2019