Ann: Ceasing to be a substantial holder, page-4

What amuses me somewhat about the lending of shares by Regal to BoA, is that BoA borrowed shares from Regal on 12 and 23 May ( from BoA substantial shareholder notice). The number of shares borrowed total 45,486,681, which happens to be 4.95% of the total shares on issue - just below the substantial shareholder notice limit of 5%.

I can't think of any reason why BoA would borrow the shares from Regal other than to short sell.

However, with the ink hardly dry on the share borrowing agreement, Regal then go and dump 8.3 million shares on Thursday and 9.3 million shares on Friday, dropping the price from 4.5 cents to 3.5 cents. Did they simply want to sell their shares first? Or did they do that just to try and make it harder to BoA to make a buck short selling?

I also wonder if BoA ever intended to go over the 5% threshold? When borrowing 4.95% of the share capital from Regal, did someone at BoA forget that they held 4 million shares from buying on market or not know that someone in another team held 4 million shares? It would have been so much easier for BoA to play their games in stealth if they had kept under that 5% threshold.

Please note that there are still over 45 million shares held by Regal and lent to BoA. These could be sold by either BoA (short selling) or Regal (as BoA substantial shareholder notice indicates that the shares can be recalled by Regal at any time). If I was Regal and wanted to keep playing BoA, I would wait for BoA to short sell a significant number on market, slowly accumulate some more shares from BoA selling, and then ask for BoA to return the shares forcing BoA to buy on market and force the price up, allowing Regal to sell out at a higher price.

After the next substantial shareholder notice (which I guess will be BoA ceasing to be a substantial shareholder), I will be keeping an eye on the Top 20 shareholders that the company regularly posts to its website. Once Merrill Lynch Nominees falls down the ranks of the top shareholders, then we will know that BoA and Regal are running out of shares to sell.