Broker updates, page-66

Without knowing the underlying details of those disclosure, we have no way of knowing whether they are intermediaries, principal, or otherwise. So won't comment on those. Also, it doesn't (shouldn't) really affect our thinking or investment strategy. What the funds and shorters do will eventually wash through. They can short it forever in theory, but unless the share falls to 0 or at least keep falling, the shorters don't actually make any money until they cover. Yes, they can report mark to market gains for their funds' returns in the mean time, but at some point, they will have to buy back/cover. I am holding till WE and Peaker come online, so I am in no rush and can easily outlast the shorters.

I think JPM is simply holding the stock as an intermediary to facilitate for some of their clients who have obviously requested for stocks to be made available for borrowing. You see, it is actually very difficult to short a stock that has no insto holdings because it's practically impossible to borrow stocks from retail. For example, when I first tried to short BRN during the early onset of Covid, I really struggled to find any brokers who had access to stocks for borrowing. For JPM, if they have clients who will pay borrowing fee of say 10% per annum (it will be similar if not slightly higher than margin loan rates), I guess they are happy to outlay the capital of buying the stocks and then lending them out to earn the lending fee. That return is almost risk free because borrowers have to post collaterals as well. So I don't think they are holding it for anyone, and I don't think Hancock can be bothered to stuff around like that. If they really want to accumulate, they could have grabbed a 19.9% stake by now without disturbing the price too much given how much liquidity have been available in the past 6 months. A substantial may come from Hancock or someone else, but it won't be via the likes of JPM, SS or Vanguard. But that's just my view of course.

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