Micromobility.com (NASDAQ:MCOM), the company formerly known as Helbiz, recently provided an update to its naked short selling investigation. The investigation, led by Share Intel, discovered “consistent imbalances” related to short seller activity of MCOM stock. That could corroborate with the “potential presence of illegal naked short sales.”
Micromobility added the following in the update:
“When compared to the average trading volume, these imbalances prove to be notably significant. The uncovered discrepancies may represent only the ‘tip of the iceberg,’ with the possibility of more extensive issues concealed within dark pools and ex-clearing activities.”
The imbalances in question allegedly show that firms maintaining short positions on MCOM did not correspond to standard day-to-day trading activities. In addition, the imbalances “do not seem to stem from regulated trading activity” and have remained stable throughout the course of the investigation.
MCOM Stock: Micromobility Provides Update to Naked Short Selling Investigation
Micromobility has disclosed that its board and CEO Salvatore Palella believe it’s necessary to move on to Phase 2 of the investigation. This would include a further investigation and establishing a line of communication with brokers, Broadridge and the U.S. Securities and Exchange Commission (SEC). Palella said the following in the update:
“We are deeply concerned about the findings of our analysis and the potential implications on market integrity. Our primary responsibility is to protect our investors and ensure a fair and transparent financial environment. We are looking to take decisive action by proposing to move into Phase 2, which would involve a thorough investigation and the implementation of appropriate measures to address these issues as soon as possible.”
Micromobility’s update did not provide many specific, concrete details on illegal naked short selling besides the alleged presence of “consistent imbalances.” As a result, shareholders are anxiously awaiting the results of Phase 2 of the investigation. The company did not immediately provide a timeline for the completion of Phase 2.
Based on the latest available data, MCOM stock has a short interest of 5.58% as of March 15. That’s equivalent to about 292,000 shares shorted. Short interest actually rose by 100.12% compared to the previous reading. Generally, a short interest above 10% is considered high, while a short interest above 20% is considered very high.
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On the date of publication, Eddie Pan did not hold (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.
