Chris Heminway, Exec-Chair at Time To ACT, explains why now is the right time for the Group to IPO. Watch the video here.
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Well they should just limit the short interest to some relatively trivial percentage of the total float, say no more than 30-50%, with say a hard 3 strikes on failure to deliver policy, resulting in a lifetime ban from participating, no excuses.
BSG, I agree with you when it comes to big cap companies but when it comes to low cap companies then I disagree. Personally for most AIM companies it should be banned. It is too disruptive and easy for manipulation.
It's like going in to a gun-slingers bar and having a problem with the swearing.
Shorting is good, it exposes cr@p companies the majority of the time.
Sure, the one share doesn't multiply - but the process of it being lent from one to another to another can be repeated.
A lends to B. B sells to C. C lends to D etc. A & C are both short. This is what happens in those cases when the short interest is over 100%. Or, to put it another way, if I were a corporate: I can sell to someone, they lend it back to me and I sell it to them again.
If anyone sells something that they don't have, then there's a settlement failure, a "failure to deliver", and that's where I'd like to see some proper penalties (rather than more law) applied.
Snooz, if you lend something to someone then they lend it to someone else it's still one share with which they may interact with the market from, it don't multiply because it's being passed from one person to another - You can only sell that specific share once and will own an immediately demandable debt upon it (point is you cannot sell the same share twice or manipulate the figures to look as though more shares are available than there really are - everything MUST be accounted for & in real time.) As for retail shorts many do go bankrupt whilst the corporate one's are bailed out by other corporates (unless they are out of favour.)
"only shares held and available may be loaned to shorts." - still wouldn't work:
Scenario: You hold a share. Lend it to a short. They sell it to someone - that person now holds it. They lend it to a short (maybe the same one). Repeat.
People would only lend shares they hold but you still end up with a system where huge (even 100% or more) is lent out.
I'd like to see the penalties for failure-to-deliver increased a lot - puts the pressure on the shorts to be really sure that they can locate and deliver the shares that they sold - hit them where it hurts, in the wallet.
Yeah they just loan out shares that don't actually exist, just gotta look at GameStop to see that, setting a sell limit high up really won't affect the system. Now the petition I would sign, "only shares held and available may be loaned to shorts." Remember you can loan your own shares out for shorting too (broker dependant), most tutes do this as they wait for the real action, accounting wise, brings down the average cost of your holding. I mostly deal US market and it's just pretty much accepted over there, remember this is not your game & if you don't like the rules don't join or leave because the BIG TUTES don't care.
Set upper limits on your holdings, prevents the market lending your shares for shorting.
Not to forget that shorting brings liquidity to the market place which would have to be covered elsewhere if it were gone. And is something that drives good shares up as those shorts get burned and HELPS investors because it SHOULD be focusing their attention on the WHY of the shorting. But shorting needs to limited to ACTUAL shares available - rather like BASIL III is set to limit 1 gold bar per gold bar contract & not 10 or so!!!
Unfortunately it helps 'create' a market and it is illegal unless you are a multi-millionaire, besides which it's impossible to stop without having extremely constraining financial laws which would pretty much stop trading for the masses.
What I find despicable is the fact that your own broker can (and does), lend out the shares in your portfolio to shorters without your permission. There are companies now that deal exclusively in borrowing and lending shares, I had an e-mail just last week asking if I'd like to make a few measly quid lending them my shares,
I said 'yes please, I'd love to make up to two whole pounds while you reduce the value of my portfolio to as near zero as you can get it before handing it back to me'.
GLA.
hi all,
invested in here but also on GGP. someone don't he board have started a petition make shorting illegal in the UK. i believe we (PI) can all benefit from this.
here is the link to sign up for it: https://www.change.org/p/department-for-business-energy-industrial-strategy-make-short-selling-of-shares-illegal
GLA