Bed Bath & Beyond (NASDAQ: BBBY) continued on a downward trajectory in morning trading on Monday as the domestic merchandise retailer shared some important information ahead of its special shareholders’ meeting on May 9 regarding its reverse stock split.
The retailer stated that some of its shareholders have enquired about “naked short selling.” BBBY stated that it “does not have specific access to information regarding any share lending or short selling transactions. While the Company is unable to confirm such activity, the Company denounces any market manipulation of its stock.”
Naked short selling occurs when investors sell shares with a promise to deliver them at a later date. However, these sellers don’t bother borrowing the stock first and when that promise is not fulfilled, naked short selling occurs.
BBBY stock has already lost more than 98% of its value in the past year.