lyc invest relations / ms / short selling

Had an interesting conversation with Lynas head of investor relations regarding the short selling action on LYC stock driving SP down.

There is nothing they can do about it obviously and would like to see the SP up as we all do however there were a couple of interesting comments regarding the shorting of LYC.

Mitsubishi UJF do not own stock per se, they only have a disclosure statement for their ownership of Morgan Stanley (22%) which is required under ASX rules. So Morgan Stanley are the prime broker and holder of all stock on behalf of both firms.

Whilst MS facilitate the short selling by lending the shares the guilty parties that are aggressive in their shorting activities are actually Asian hedge funds.

These Asian hedge funds are shorting Lynas to hedge their exposure to China amongst other things.

They are known to Lynas. What can they do? Bugger all.

The interesting thing is that the bank of shares which has been used to short LYC is just about used up.

LYC do say that there are limits to how many shares these guys can get there hands on and sell, that limit has just about been reached.

Cover rally may be imminent, the SP is low enough and the shorting can't go on for ever...

For the record LYC regards MS as a great long term supporter of the company. The numbers they play with Globally are just so much bigger than their stake in LYC, if you get my drift.

Anyways just thought I'd share this info for those interested.

As usual its beer o'clock at Tims Bar and Grill and I have an open TAB. Cheers.