Scilex Holding Company Takes Steps to Protect Stockholders
Scilex Holding Company (NASDAQ: SCLX) is committed to safeguarding its stockholders’ interests while enhancing their value. The management has acknowledged the rising concerns related to manipulative practices, specifically targeting naked short selling of Scilex common stock.
Record Date for Preferred Stock Dividend Set
Recently, Scilex announced a record date for a preferred stock dividend, which is significant for stockholders and other securityholders. Although a specific payment date has yet to be established, the management asserts that this date is subject to change by the board of directors at any moment prior to the payment.
Current Status of Scilex Common Stock
As of the latest updates, Scilex has approximately 197 million shares of common stock issued and outstanding. Notably, 76 million shares distributed by Sorrento Therapeutics, Inc. as dividend shares are restricted until early 2025 due to a court order. Furthermore, Scilex has redeemed about 60 million shares of common stock and 29 million preferred shares as of September 2023, leaving roughly 60 million shares available for public trading on the Nasdaq Capital Market.
Concerns Over Naked Short Selling
The management of Scilex believes that around 12 million shares of Scilex common stock are currently under short-selling arrangements. Concerningly, there are also over 10 million Dividend Shares alleged to be engaged in naked short positions. This situation raises red flags about the validity of stockholder votes, as reports indicate a substantial number of shares had not been voted at previous annual meetings, potentially signaling malpractice in trading.
Taking Action Against Manipulative Practices
Scilex management is actively addressing these issues by collaborating with regulatory authorities and pursuing legal avenues to expose and rectify any irregular activities undermining stockholder rights. This effort aims to restore trust and transparency in the market.
Recall and Secure Your Shares
Stockholders can take proactive steps to protect their investments. This includes recalling shares from brokerage lending programs, opting for cash accounts, or transitioning shares to a Direct Registration System (DRS) account. Such measures can impede manipulative trading practices associated with stock lending.
Ensuring Delivery of Dividend Shares
Beneficial owners entitled to Dividend Shares can request immediate delivery from their brokerage firms. It's advisable first to verify that their accounts are not involved in lending programs that may expose them to increased risk.
Guidelines for Communication with Brokerages
To facilitate these actions, Scilex has provided templates to guide stockholders in their communication with brokerages. Clear and direct requests are critical in ensuring accountability from financial institutions regarding the management of Scilex shares.
Enduring Commitment to Shareholder Interests
Scilex Holding Company remains dedicated to enhancing shareholder value and upholding the rights of its stockholders. The management encourages stockholders to consult financial advisors to make informed decisions about their holdings.
Frequently Asked Questions
What steps is Scilex taking against short selling?
Scilex is actively working with regulatory authorities and pursuing legal actions to combat manipulative short selling practices that negatively impact stockholder value.
How does the record date for the dividend affect stockholders?
The record date is essential as it determines eligibility for dividend shares, but it may be subject to change by the board of directors.
What are the risks of naked short selling?
Naked short selling can undermine stockholder voting rights and inflate the number of shares traded, damaging overall market integrity.
How can stockholders safeguard their investments?
Stockholders can recall shares from lending programs and opt for direct registration to protect their assets from manipulative practices.
Where can I find more information about Scilex products?
For comprehensive details about Scilex Holding Company and its products, visit their official website.
