Normally I would say you guys are full of it. However, I called up Etrade awhile ago for my certs on 4 million shares, now 4.4. They told me that they could not issue them as the Transer Agent was not issuing certs due to past stock cert problems. Naked shorting is the only way this stock can be kept at 3 million market cap.
This is in addition to the shares held by individual investors and insiders. The only way that I can think of is that fake, counterfeit, shares are circulating, naked short shares that were never delivered but which are, all the same, registered as owned by somebody who bought them.
Since most shares are held in street name, you never notice if a share was delivered or not. You would have to ask for the share certificate, something that naked short sellers know most of us will never do. So we don't notice that we have been sold fake, nonexistent shares.
Why is this important? The law of supply and demand says that these two forces must meet at a point of equilibrium by raising or lowering the price until the market clears. Now suppose that naked short sellers add 27% fake, counterfeit shares to the market. The only way they can clear is by lowering the price OF ALL THE SHARES. Now suppose you have some CMG or NILE on margin -- you could easily get a margin call and be wiped out. For companies and institutions that have to mark-to-market their asset values, they might run afoul of reserve requirements and the rating agencies may cut their ratings.
Naked short selling is a cancer in the financial system that is killing not only the companies under attack but also anyone who happens to own securities of these attacked companies.