RE: short5 Mar 2021 12:25
I don't think you understand short positions fully Gusto.
*Firstly short positions are only published if above 0.5% in the UK.
*It is possible to accumulate many short positions of just under that size if you have associate companies or indeed a bunch of like minded and sympathetic companies.
*If < 5% all of those therefore stay under the radar and don't have to notify. There are imho many of these you never see)
*Those declared (i.e over 5%) can be used to drive down the price but with the ulterior motive of actually buying far more stock than they have shorted down. Threshold for notification of a holding is 3% and much higher. So you can in theory accumulate sizeable positions without again having to disclose a holding.
*Some of the existing short positions are historic and have probably been simply forgotten about or the notification of closure of position has got lost in the post.
*Nothing stopping them or anyone else going "long" with any spreadbetting firm as they are closing. No disclosure rules that I am aware of.
Cineworld and Tullow for instance both had an abundance of short positions, and probably still have albeit some will have reduced, but it hasn't prevented the share price multiplying many times over. Cine from 16p to 110p and TLW from under 10p to just over 50p this morning.
You normally always find that a buyer emerges behind the scenes that holds accumulates and then holds more than all the pre-existing shorts combined. So what actually was the fuss about?
When you have a vaccine rollout that is surpassing expectations and people can sense normality again and can see that economies are starting to and will recover and the same with resurgent oil prices just leave them to it. They either have to close or hedge their positions or they incur large losses and all whilst people and other institutions start to buying the same stock. Ultimately that can lead to a short squeeze.
For what it is worth I think, just as I did with CINE, that there have been an abundance of <0.5% short positions here suppressing things. It's those that are closing, whilst MS and others have also been buying.
I suspect it will only intensify further as we get closer and closer to April 12th reopening - and permanent reopening and things getting back to full normality.
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