Sep. 29 at 12:50 PM
$BYND$WOLF $GOEV $KITT How this ties to FTDs
FTDs = when a short seller fails to deliver borrowed shares on settlement day.
If the pile gets big, brokers/market makers need a way out.
New issuance (ATM, S-1, PIPE deals) can hand them clean shares to settle those obligations instead of being forced to buy back in the open market (which would squeeze the price up).
Result: the synthetic supply gets absorbed, retail never sees the squeeze.
Why Delaware / bankruptcy setups matter
In Ch.11 or “Delaware wash” structures, companies can authorize new shares easily as part of a plan.
These new shares often go to creditors, hedge funds, or backstop parties — the same ones that might be short or entangled with the FTD problem.
By issuing into escrow or directly to those parties, they can quietly “clean” the books.