PLS (ASX) The Impending War Against Short Sellers

Originally posted by Hitmuli ↑

Corporate watchdog ASIC to release new board advice on short selling attacks

By Sarah Danckert

April 11, 2021 — 7.45pm

The corporate watchdog is poised to recommend that boards adequately respond to short-selling attacks amid a global push to develop consistent rules around the practise and weed out ambush tactics used against some listed companies.
In an information paper set to be released imminently, the Australian Securities and Investment Commission is expected to tell listed company directors they should respond to short selling attacks in detail, and not merely dismiss them as false or attempts at market manipulation.
The corporate regulator is poised to issue advice to boards on how to respond to short selling attacks. SYDNEY MORNING HERALD

Short-selling, which has existed since the dawn of financial markets, is the practise of borrowing securities from long term holders, and selling them on the market with the aim of buying them back at a lower price for a profit. In recent years, a more aggressive form of the practise has emerged, with activist researchers and short selling firms releasing public reports criticising companies and often accusing them of engaging in fraudulent behaviour.
The rise of activist short selling has created a schism between the investment community and the corporate director fraternity. While large sections of the equities investment landscape engage in short-selling and support the practice, corporate directors have argued they are given inadequate notice in so-called “short and distort” attacks, which they claim often involve incorrect information that results in steep share price falls.
ASIC is broadly supportive of short sellers believing they serve a purpose to provide liquidity and greater transparency in markets. The information sheet is expected to provide further clarification of the obligations of companies and other market participants.
Market sources who declined to be named because the ASIC information sheet was still in draft form, said the regulator wanted companies to use their platform on the Australian Securities Exchange to hit back at such reports.
ASIC’s information update is also expected to suggest that best practice for companies under a so-called short attack would be to enter into a trading halt as soon as becoming aware there is negative research being circulated by short sellers. This policy aligns with ASIC’s previous public statements on the issue.
The sources said that while it was tempting for directors to provide an emotional response decrying negative research as false, it was important that companies demonstrate to investors why the research was false or to clarify the materiality of any elements raised in the reports to lessen the impact. The final draft of the new information sheet may not be released for some weeks, sources said.
Earlier this year, ASX-listed employment portal Seek Ltd saw off a short attack from the relatively respected research house Blue Orca but only after trading was paused in its securities and it entered a two-day trading halt. The halt gave the company time to respond to allegations about its accounting disclosures and the performance of its Chinese business.
Blue Orca was born out of Glaucus Research, which uncovered serious accounting issues at collapsed sandalwood grower Quintis and Brisbane investment firm Blue Sky Alternative Investments, which also fell into administration following revelations of issues with its disclosures and performance.
Blue Orca hit back at Seek’s response calling it a “flimsy, 2-page response (the “Response” to our Report in which it failed to meaningfully address any of the substantive evidence of fake posts and zombie resumes raised in our report”. However, Seek shares closed at fresh highs on Friday, up 2 per cent at $31.39.
ASIC has no regulatory oversight of offshore activist short sellers, which are not required to be registered in Australia.
The ASX has for the past few years recommended that companies use trading halts and the exchange’s company announcements platform to respond to short selling reports, saying it viewed short sellers as an important check and balance on share markets.
“The issue is the ambush tactics of offshore, unregulated short sellers that drop reports with sensational claims into a live market without warning, and often with an accompanying social media campaign. These tactics are employed to cause damage for a commercial reason,” an ASX spokesperson said.
While the ASX does not regulate short selling, the spokesman said: “Our preference is for the short seller to release its report outside of the market’s trading hours and to give the target company a chance to prepare a response.”

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How about this for an idea?

You cannot 'borrow' anybody's shares - whether held by retail or institutional - without written permission to do so from the owner of those shares.

Then it can be clear as to whether you support the practice or not.

Personally I am of the opinion that they are my shares and whoever else can keep their damn hands off them.

All IMO and GLTAH

No.	Vol.	Price($)
1	621	$3.92

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621

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2800

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1	621	3.920
1	16352	3.540
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621

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16352

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64578

3.370

Price($)	Vol.	No.
3.010	2800	1
3.100	22985	2
3.110	109897	1
3.120	12532	1
3.170	18818	8

Price($)

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3.010

2800

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22985

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109897

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12532

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18818

(20min delay)
Last $3.27		Change 0.000(0.00%)		Mkt cap ! $9.846B

Open	High	Low	Value	Volume
0.0¢	$3.30	$3.21	$303.3K	92.77K

The Impending War Against Short Sellers, page-60

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