This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy.
Long gone are the days when retail traders used to rail against the supposed manipulation of downtrodden stocks by short-sellers. Even though the WallStreetBets movement enjoyed spectacular early success in shuttling GameStop shares to the stratosphere at the start of 2021 in what quickly turned into a full-blown short-squeeze, the movement has, in recent past, largely fizzled out. Now, however, it appears that some companies have picked up the proverbial baton against illegal stock manipulation, as evidenced by Genius Group’s (NYSE: GNS) quite aggressive recent moves against short-sellers.
As a refresher, Genius Group is a Singapore-based edtech company that aims to revolutionize the global education system by pioneering a much more pertinent and student-centered curriculum. Genius Group shares were publicly floated on the New York Stock Exchange back in April 2022 at $6 per share. Over the past few months, the company raised $40 million via two funding rounds to expand its balance sheet to over $60 million. However, in what the company thinks constitutes aberrant selling pressure via coordinated waves, the stock plunged to around $0.30 per share by December 2022.
In order to tackle this manipulation, Genius Group hired Warshaw Burstein, LLP and Christian Levine Law Group as investigating agents, with financial tracking provided by ShareIntel. According to the company’s press release, this investigation unearthed “a significant amount of the Company’s ordinary shares, as part of a market manipulation scheme seeking to artificially depress the price of the Company’s ordinary shares.”
On Wednesday, Genius Group then announced a series of bold moves:
- The company’s board of directors is now ready to explore legal options against the manipulation of its stock price.
- The board has authorized the issuance of a special dividend to identify the true owners of its share float.
- The board is considering the possibility of a dual listing of its shares.
Today we launch the Illegal Trading Task Force, led by Timothy Murphy, Genius Group Director & Former Deputy Director of the FBI. This is one of a series of actions the $GNS Board voted on to fight #NakedShorts. More steps in the comments below: pic.twitter.com/g5eamq2HiZ
— Roger James Hamilton (@rogerhamilton) January 19, 2023
However, in what constitutes a coup de grace, Genius Group has now hired an ex-FBI official, Timothy Murphy, to head its Illegal Trading Taskforce.
Wall Street Math: $GNS 10m float. Today 250m traded. 25X float. Nothing suspicious there… We’re tracking every trade and we’re coming for you #NakedShorts
— Roger James Hamilton (@rogerhamilton) January 19, 2023
While highlighting the rationale behind these moves, Genius Group’s CEO, Roger James Hamilton, recently tweeted that the company’s share float consisted of only 10 million shares, yet the stock’s trading volume was recorded at 250 million yesterday.
Not just that but supposedly 124,338,900 Million shares sold short, where we these borrowed from then?? Over 70% of volume ran off exchange via dark pools, exactly the same as $AMC & $GME. There time is up tick tock. pic.twitter.com/PiT0vzIRnj
— Ben Blackburn 🇬🇧 (@BenBenlackburn) January 20, 2023
According to the company’s proponents, equity dark pools are being used to manipulate Genius Group’s stock price.
Meanwhile, as per the tabulation by IBorrowDesk, the fee to short Genius Group shares is currently hovering at 72 percent. The stock also recorded a volume of over 269 million shares yesterday!
Clearly, short-sellers have been closing their short positions over the past two days, resulting in a fierce short squeeze. Consider the fact that the stock was trading at around $0.5 on Wednesday but is currently hovering well over $4 per share in pre-market trading, constituting a gain of over 600 percent in around 48 hours!
HELBIZ INC - BOARD OF DIRECTORS HAS BEGUN EXAMINING MEASURES TO ADDRESS ALLEGED ILLEGAL SHORT SELLING OF ITS STOCK (HLBZ)$HLBZ
— *Walter Bloomberg (@DeItaone) January 20, 2023
Do you think GameStop and AMC Entertainment should go after short-sellers in the same manner as that adopted by Genius Group? Let us know your thoughts in the comments section below.
