A new company now seems to be targeted by naked shorts, at least that’s what a CEO and former AMEX Vice President are alleging.
Collective Audience (CAUD) stock has had a rather steady share price since 2021.
Shares of the advertising company rose to more than $27 per share on Wednesday, October 25th before getting halted and crashing to its current $1.50 levels.
CEO Brent Suen has since purchased 190,000 shares of CAUD stock but claims there seems to be a high probability of fraud at play here.
“NASDAQ halted trading on October 25 due to a non-qualified float below 500,000 shares.
However, on Nov 3 and 6 the float was still 61,000 shares and the price had fallen from $27 to $5.31 down 80%.
NASDAQ did not halt the stock during that time,” Suen told Frank Nez.
Collective Audiences’ partners are now on the radar as suspects, though an official investigation has yet to be announced by the company.
One scenario states that CAUD’s partners may have sold company shares at the top and began shorting the company as prices began to plunge, causing further devaluation.
The second scenario sheds light on the possibility of naked short selling.
The CEO has a strong concern that hedge funds may have collectively shorted the company ‘naked’ after the surge on October 25th.
Tony Forte, former Vice President of the Trading Analysis Division at AMEX reached out to Frank Nez to confirm irregularities in the trading of Collective Audience stock.
“Over the last few years I have closely followed the trading activity in LGIQ, prior to and after the spinoff of DataLogiq into the Arbi SPAC.
I strongly believe at least two thirds of the floating supply is held by shareholders who have no intention of selling any of their shares until CAUD is trading at much higher prices. That conclusion would reduce the current floating supply to under 1.2 million shares.
The substantial and continuous selling in CAUD appears to be the result of computerized trading based on sell side algorithms accompanied by short selling, most likely naked, by marketmakers and large investors,” Forte shared with Frank Nez.
“The computerized trading was particularly evident on December 7th: At 10:10 am, the last sale in CAUD was 2.10.
From 10:10 through 10:15 the stock decline to 1.82, down 28 cents, on trading volume of 113,995 shares. During that five minute time span there were 576 trades.
Although the short activity, reported by FINRA, during the October 25 through December 11th period was only between 25-30% it would still indicate that 11-12 million shares were sold short.
In order for the algorithm computerized trading to show a profit in CAUD, which has a very small float, there would have to be at least 4-5 firms utilizing that strategy. That raises the question of “working in concert”.”
CAUD stock is currently down more than -86% this year-to-date.
This is a developing story — for more updates on CAUD and other stocks, follow me on X: https://twitter.com/FNez_Blogger.
Also Read: MULN Stock: 5 Billion Shares in Illegal Scheme Now Confirmed
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