A surprising move today in a small-cap stock is the subject of significant interest for many retail investors. The surge in Global Tech Industries (OTCMKTS:GTII) has encapsulated the interest of many investors, with GTII stock now up approximately 65% at the time of writing.
That’s because this surge coincides with an interesting press release circulating today. Global Tech, which is focused on “acquiring new and innovative technologies,” announced that it has retained a law firm to dive into potential market manipulation with its stock. In particular, the company is interested in possible naked short selling, which may have significantly impacted its stock.
Undoubtedly, this move is one that many retail investors are touting as bold and much-needed. Naked short selling refers to the ability of certain investors to short shares that don’t exist, which was made illegal following the financial crisis.
Let’s dive into what to make of this news and the impressive move we’re seeing in GTII stock today.
GTII Stock Surges on Reports of Naked Short Selling Investigation
Naked short selling is a complicated topic and one that really deserves a much longer article to truly grasp. In essence, shorting shares that don’t exist isn’t easy to do, with regulators closing many loopholes that allowed for such practices in the past. That said, with discrepancies between paper and electronic trading platforms, it is possible and has been proven to have happened in the past. Thus, maybe there’s something here.
Notably, the law firm Global Tech has hired to pursue this matter, Christian Levine Law Group, is reputable in its successful prosecutions and collections attempts in the past in this realm. Accordingly, it appears investors are very eager to see what this investigation uncovers.
It’s important to remember that allegations of naked short selling tied to bringing down the previous meme-stock surge last year still have many investors irate. Market manipulation is the boogeyman many investors like to blame for stocks coming down to reasonable levels after soaring to unreasonable levels. That said, if there’s something here, it’s likely this law firm will find it.
Personally, I think today’s move may be overdone, but we’ll have to see. Momentum-driven rallies could begin to proliferate again, with the Federal Reserve hinting at slowing rate hikes today. Thus, maybe we’re due for another surge into early next year for meme stocks such as GTII. We’ll see.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.