Take one commodity stock ( say headphones maker) and short (over time) over 10 million shares.
Do so for 6 - 7 quarters straight, ( directly after an IPO where insider shares are locked up). Doesn't matter that each time company beats financial forecast results.
Do so to a management and board of directors that do not fight back.
Do so to a management and BoD that is seeing largest personal net worth increase ever, thus will get tired and eventually sell their insider stock so they retain being millionaires.
On key days when market rallies, have negative news come out ( downgrades, etc.)
Buy back shares at end of day, thus stopping any short covering rally.
Short more shares at beginning of day thus putting uncertainty and fear in place for the day.
I have to hand it to the shorts. Their game plan is a thing of beauty. Especially if the SEC is not looking and management is not bringing this obvious and blatent manipulation to the SEC's attention.
The shorts have essentially manipulated the stock to the downside by 10 million shares.
Here is the key: NOW THEY HOPE ALL OF US LONGS ARE SO NAIVE AND SO NEGATIVE THAT THEY CAN SCARE US INTO SELLING ( convincing us on message board that this is a "broken stock") WITH NO FIGHT AGAINST THEM COVERING.
PV... You have hit the Short Manipulation right on. You did however bring up a couple of key things that may help this stock (ultimately).
The company IS profitable. IMO although they may not grow EPS at the speed that was forecasted, they will return earnings to the bottom line. That is NOT a broken company as some have shouted from the distant mountain tops.
Shareholders who HOLD their shares will ultimately squeeze out shorted shares always has always will as long as the company is solvent. Day traders all are crying, but there has been many opportunities to buy and sell this stock at a profit.
There may be more pain here, but the company has a nice niche market plan and shown innovation and the ability to adapt and grow revenue. Earnings may suffer, but the boat hasn't hit an iceberg yet! Unfortunately as you stated the management is to blame here for the stock value drop. They do however redeem themselves as operational managers somewhat.
I think at this level (8 bucks a share) and earnings of a buck a share and revenue exceeding market cap by a wide range along with new product adaption (over the ear and gaming at value prices) the stock had hit bottom and will rise. The risk reward to short is so low now and shorts are trying to manipulate the stock to cover not lower the price. 8 million shares still are out there that need to cover.