Share Price manoeuvring12 Apr 2018 12:33
I borrowed this info from elsewhere but wonder how much this applies to PAF. No doubt share price movements are subject to many behind the scenes forces!
"Qualifying shareholders, such as pension funds, institutions, fund managers, etc. can lend the shares to others for a small return (interest rate).
The market permits holders to go short but if they reach the settlement date without having bought back in, they can borrow shares to satisfy the trade, allowing them to keep the short open potentially indefinitely at a relatively small but known cost.
They will presumably do this in anticipation that they will be able to buy back in and close the short at a much lower price than they sold the shares short at, thereby making a profit.
It was shorter (especially Hedge Funds) that almost drove HBOS into oblivion.
IMHO the practice should be banned. The shooters can make money by destroying corporate value, which is morally wrong. In 2008 the practice was suspended to allow an orderly market to recover in the midst of the crash. But nobody has had the bottle to ban it because they are persuaded that shorting is important for the 'efficiency of the market'.
IMHO it is not necessary with so many ETFs and similar nowadays...if shorting was banned, ALL share prices would be higher than otherwise...
And of course MMs love it...sell shares you don't own; mark the quote down; buy the shares; easy money..."
Any thoughts that some of this type of activity could have driven PAF down 50%?