Genius Group Limited, through its subsidiaries, provides entrepreneur education system business development tools and management consultancy services to entrepreneurs and entrepreneur resorts. The company operates through two segments, Education and Campus. Its courses, products, and services form a full entrepreneur education curriculum together with a full suite of tools for students. Why am I telling you this? It is also the top stock mover for the week with a one-week change of over 400%. In most cases, and also my initial reaction after seeing that, I would consider shorting the stock the following week because generally after a quick surge retail investors sell off to recoup some of their profits. I was planning to short the stock until I stumbled across some interesting information. Here’s why I changed my mind on shorting the stock.
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Naked shorting is the illegal practice of short selling shares that have not been affirmatively determined to exist. Normally, before selling a stock short, traders must either borrow it or verify that it may be borrowed. Therefore, the term "naked shorting" refers to short pressure on a company that may be greater than the market's tradable shares.
By repeating that process again and again, bad actors can generate massive profits and manipulate a stock’s price lower, with an ultimate goal of driving a company to bankruptcy, at which point all the equity is wiped out and the naked shorts no longer need to be covered.
Due to regulatory gaps and differences between paper and electronic trading platforms, naked shorting persists even though it was rendered illegal following the financial crisis of 2008–2009.
This in and of itself is not novel. In reality, WallStreetBets and meme stocks became popular as a result of firms engaging in this strategy. Popular meme stocks GameStop and AMC are just two examples of businesses that were under pressure; once retail investors discovered what was going on, they came together to support their beloved businesses.
Enter Genius Group Limited. Shares of Genius Group skyrocketed 290% on Thursday alone after they appointed a former FBI director to investigate naked short selling of its stock while also issuing a special dividend to help flush out the crooks. Volume of 197.76 million shares traded crushed the 65-day average of just 634,17.
Timothy Murphy, a former deputy director of the F.B.I. and current board member, will serve as the task force's leader. It will consist of Roger Hamilton, the CEO of Genius Group, and Richard Berman, who is also a Genius Group Director and serves as the committee's chair.
After the financial crisis, the Securities and Exchange Commission (SEC) prohibited naked short selling in the US in 2008. Only naked shorting is prohibited; other forms of short selling are not included.
Before this restriction, the SEC changed Regulation SHO to reduce the possibility of naked shorting by closing 2007 loopholes that certain brokers and dealers had used. The publication of lists that monitor equities with exceptionally high trends in failing to deliver (FTD) shares is mandated by Regulation SHO.
As mentioned previously, the news sent the share price up over 200% on Thursday and an additional 59% on Friday. About 270 million shares traded in Thursday’s trading session, another indicator of wrongdoing according to CEO Roger Hamilton given that the company’s float is just 10.9 million shares.
Genius Group has proof that some people and/or businesses sold but failed to deliver a "substantial" am