June 16, 2009
I have been involved in purchasing and selling stocks for over 25 years. I have had a very difficult time understanding the benefit to the market when short sellers jump on a stock and continue to pound on it relentlessly. It is certainly a disadvantage to the company whose stock is being shorted in this manner. The stock price eventually does not reflect the true value of the stock after it has been shorted relentlessly.
The ability to short a stock may have some benefit to the market. Unfettered ability to continue shorting a stock does not seem to have any benefit to the market. It not only destroys the efforts of the company whose stock is being shorted continuously, but it directly adversely affects share holders who are long on the stock.
I have spoken to my broker and to my financial adviser about this issue and their suggestion is that the SEC reinstate the circuit breaker uptick rule. I think that proposal makes a lot of sense. I would ask the SEC to strongly consider this proposal.
Thank you for your consideration of this e-mail.
Dennis W. Lane