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26/07/15

19:30

Post #: 15696037
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Originally posted by hindmost ↑

I have complained about shorting several times to ASX/ASIC, but no-one will listen. The problem is this :

In normal trading, at any given time there are x shares on issue, and the competition between buyers and sellers is balanced - no matter how many shares are traded there are always the x shares on issue.

But when y shares are sold short, there are x+y shares on issue. [The original owner of the shorted shares still owns them and benefits normally from all dividends etc. But another entity now owns the y shares too, and benefits equally - they have no knowledge that the shares they own.]. That is effectively a dilution, and the share price falls accordingly. So shorting shares itself manipulates the share price downwards. [Without the shorting, the new owner would have had to compete for the x shares in the market. In other words, shorters can simply take new buyers out of the market.]. There are controls on how much a company can dilute without shareholder approval. There are no controls on how much third parties can dilute without shareholder approval. The whole shorting system is manifestly unfair.

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Yes I understand. Also with n news coming from the company, it leaves the stock to be in limbo. On news it could g either depending n the outcome. A poor performance from the company not updating shareholder and keeping them in the dark.

SGH Price at posting: $3.60 Sentiment: None Disclosure: Not Held
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