As I was saying, a Euro broker well known (read: infamous) for mammoth shorting of mid-cap ASX stocks has a role in GEM's current downdraft. The broker has a "Buy" recommendation on the stock for its clients, yet shorts because it can move the market sentiment and price -- easy enough when you short sell 1 million shares in an hour!
Incidentally, Goldman Sachs got into legal trouble for a similar routine. It sold an asset to clients (i.e. recommended it to them) then shorted the same asset. Not sure of the outcome of that case (3-4 years ago), but might be another tick on this Euro broker's list of no-no activities.
My general view is that shorting does not contribute to markets (the liquidity argument is moot). But at least ASIC needs to shut down shorting (or for that matter buying) in such large volumes relative to daily trading volumes. It's manipulation, which undermines underlying market buy-sell dynamics.
GEM Price at posting:
$3.22 Sentiment: None Disclosure: Held
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