GNS - BLUE Apron (APRN) Stock Fans Push for CEO to Tackle 'Naked Short Selling'

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The recent crusade against potential market manipulation began after Genius Group (NYSEMKT:GNS) announced that it had formed an “Illegal Trading Task Force” to investigate naked short selling. Following the announcement, shares of GNS accelerated higher by over 250%.

It appears that other companies were taking notes. Shortly after the announcement, Helbiz (NASDAQ:HLBZ) CEO Salvatore Palella announced a similar plan of action to investigate naked short selling, which drove shares of HLBZ higher.

Now, shareholders of Blue Apron (NYSE:APRN) have taken it upon themselves to draft a petition against naked short selling. At the time of writing, the petition had over 500 signatures.

APRN Stock Holders Call For Naked Short Selling Investigation

The petition asks CEO Linda Findley to investigate naked short selling, which is “damaging our investment.” In the comments section of the petition, shareholders are confident that something fishy is going on with APRN stock.

Naked short selling occurs when a short seller does not own all or any of the shares at the time of settlement, which results in a concept known as failure to deliver (FTD). This can result in the creation of phantom shares, which could lower the price of a stock due to dilution.

According to Fintel, a total of 2.42 million shares failed to be delivered last month. FTD was relatively high during late September and early October.

The Securities and Exchange Commission (SEC) notes that naked short selling is “not necessarily a violation of the federal securities laws or the Commission’s rules,” and in some instances, contributes to market liquidity. In addition, retail investors cannot enact FTD scenarios, although market makers and broker-dealers can.

Meanwhile, shares of APRN stock have declined by over 80% in the past year. The big question is whether that decline is attributed to company health or market manipulation.

During Q3, Blue Apron reported revenue of $109.7 million, which was flat year-over-year and down 11.7% quarter-over-quarter. The average customer order value tallied in at $70.83, a record high and up 13.7% YOY. Furthermore, the company also flagged a going concern risk in the event that a private placement of $56.5 million from RJB Partners is not received. In Dec., Blue Apron received $1 million from the private placement, which resulted in the issuance of 176,991 shares.

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.

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