Growing doubt on COVID-19 Application, page-41

"I spoke to a broker who confirmed that Regal participated in the capital raise and with the new shares they closed out their short position
My fault if it was not clear and I hope I cleared it up for you"

You certainly did clear it up; thank you kindly for doing so.
Because what you wrote before made no sense.

Yes, that is normal hedge fund practice - to short stocks that are underf-unded and then cover those short positions when the raising comes, instead of having to buy stock on-market.

And soon after the raising, those hedge funds almost certainly commence shorting again, in anticipation of the next raising during which they will again cover their shorts.

The hedge fund wins.
The broker wins.
The company management wins (it gets the money it needs)
Minority shareholders? Not so much; they lose.


When you next speak to your broker ask him how many times Regal has done this before, and I'm sure he will say many times, if not just about every time.

The question that I'd ask at an AGM if I was a MSB shareholder is why my managers willfully mandate the broker to place newly issued stock to hedge funds to facilitate their short covering. Because management knows where placement stock goes and to what end.

I mean, all of us on HotCopper know what's going on, so management certainly will too.

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