Just so there is no confusion, being added to a threshold naked short list is a GOOD thing for longs. It will increasing the buying pressure as the shorters scramble to 'buy' back the short position to cover their losses.
No doubt some of these practices get confusing, but it is common, think about these 10,000+ shares out there that are short and have to be bought back to settle the accounts. If you want a decent price for your shares, hold off on selling and make them run the price right back up over $4 where it belongs.
JMO......GS40
Investopedia explains Threshold ListA security will make the threshold list if it meets the following criteria over five consecutive settlement days:
1) The total number of fails to deliver exceed 10,000 shares,
2) The total number of shares that have failed to deliver exceed 0.5% of the outstanding shares and
3) The security is listed on a similar list by a self-regulatory organization.
Once a company is added to the list it remains there until the 'fails' fall beneath the benchmark standards for five consecutive trading days. Many stocks that have allegedly seen naked short selling will end up on this list.