ms a substantial holder on borrowed shares!, page-11

londonder is right.

hedge funds nearly always use borrowed money to invest. it is generally part of what a hedge fund does. but not all hedge funds use borrowed money only most of them. so they might have $100m in capital but can invest $500m due to borrowing. they get these borrowings off the prime broker which in this case is Morgan stanley.

so the hedge funds tells MS its prime broker to buy GNS shares in this case $49m but it doesnt have the cash to pay for them and so borrows the money off MS...sometimes it uses cash but generally for smaller amounts as you can see from the notice.

this is why I say that I was a little disappointed that hedge funds were the only buyers and not strategic investors because at some stage they will sell out of these position if the price goes up enough..but not all hedge funds work this way. because borrowing costs are very low at the moment they can hold the gunns position for quite a long time without incurring large borrowing costs..the lending cost might be around 5% per annum so no big deal when you have already made 50% on the shares you bought....

my view is that it just means the new holders of GNS shares are probably likely to be in it for a short term gain rather than long term but as I say there asre somee hedge funds who operate for the longer term and if this is one of these they may hold for a while

Lord