The other thing that must be stopped is predatory short-selling.
If you short a company, you cannot take it over within 3 or 6 months.
When you short a stock, you usually wear a risk that if the SP rises then you have to cover the difference.
Companies are shorting a takeover target, knowing there isn't much of a risk of the SP rising beyond what they would be willing to pay for it.
e.g. Company A's stock is at $1.00
Company B wants to take it over and knows they will need to pay 30% or more.
They borrow enough volume over time and short it to 70 cents or less.
Then they make a bid at 1.10 representing more than a 50% premium to the prevailing SP, but only 10% premium over the original SP they engineered lower.
If you short, then you're out of contention for at least 3 months IMO.
Market integrity depends on it. Also, why don't they report cumulative net short volumes on stocks?
Shorting a stock creates a delayed demand but present supply, because the shorter will have to close the position out. Yet the selling pressure is created now, which makes the SP fall further than it would otherwise.
What's worse is that we don't have a view of this delayed demand.
It is a blatant distortion of the market.
DTE Price at posting:
12.1¢ Sentiment: None Disclosure: Not Held
