The Austin, Texas-based cloud platform provider said it is concerned that its shareholders are being victimized by manipulative trading practices and abusive short selling.
The firm will provide short sale trading statistics and market integrity surveillance to spot trading irregularities and ultimately report violations of the law to regulators.
READ: Phunware's Knowledge Graph and Data Exchange initiatives help build brand awareness and subscription conversions
“We will not tolerate value being stolen from our shareholders by well-organized groups engaging in what we believe is potentially illegal activity,” CEO Matt Aune said in a statement “We are in the process of addressing these issues and exploring all available options including bringing direct legal action against any offending parties.”
Back in July, Phunware hired ShareIntel – Shareholder Intelligence Services to track market participants and analyze share ownership for Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA). Since then, the company said, Phunware has been compiling data and evidence on offending parties to enforce compliance by filing complaints with those agencies and the Nasdaq, as well as exploring possible legal action.
Phunware encouraged any shareholders who “believe they have been harmed by their trading institutions and market manipulation” to file formal complaints with the aforementioned agencies.
For now, the company’s next steps include analyzing Non-Objecting Beneficial Owner lists to calculate share imbalances, Identifying trading institutions with gross share imbalances and sending notices of imbalances to institutional compliance officers and the Nasdaq’s enforcement arm.
According to an SEC article, “Unrestricted short selling can exacerbate a declining market in a security by increasing pressure from the sell-side, eliminating bids [by executing against them] and causing a further reduction in the price of a security by creating an appearance that the security price is falling for fundamental reasons even where there is no fundamental basis for a price decline.”
Shares of PHUN traded 4.8% higher Monday to $0.87.
Phunware, which launched in 2009, provides a fully-integrated enterprise cloud platform for mobile that provides products, solutions, data and services for brands worldwide.
The company’s Multiscreen-as-a-Service (MaaS) offerings, including engagement, management and monetization initiatives that helps the world’s most respected brands create category-defining mobile experiences.
Contact Andrew Kessel at [email protected]
Follow him on Twitter @andrew_kessel