Surely the index fund sell to the shorts. Closing them out. Then...

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wot

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18/09/24

12:03

Post #: 75724611
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Originally posted by kmuirhead: ↑

Someone might know the answer.

It is my understanding that the index funds must unload all of their STX holdings come close of business this Friday - or soon thereafter.
It is also my understanding that many of the shares that the shorters have sold have been borrowed from the index funds.

So what happens? Do the index funds request their shares back so they can sell them? If so, do we see a flurry of buying activity from the
shorters in the next couple of days with an inevitable rise in the share price.

Lets suppose this happens. Then the index funds will have to sell them to new buyers with a consequent depression of the share price.
Is the share price in for a roller coaster ride?

On the other hand if the index don't, or can't, request the return the early return of lent shares I think this means that the index funds will
not be strictly following the index.

The third scenario is that the shorters buy shares that the index funds put on the market - in an orderly fashion. I believe this means that
eventually, we will need new buyers. It seems the perfect opportunity for a would be predator to obtain a sizable stake at a low price.

The last scenario is that the shorters maintain their positions under the belief that they can force the share price down further. Given the potentially very positive news that Strike will release in the near term, this seems unlikely.

Interesting times ahead.

Expand

Surely the index fund sell to the shorts. Closing them out. Then Jp Morgan/Macquarie/State Street reveal they held for a beneficiary aka Hancock who settles and hurtles to a 15-20% substantial holder notice/blocking stake. All purchased for a vwap of 20c, maybe even lower. Shame Sn wasnt concerned about his shareprice, might have lost him his company.

Last edited by wot: 18/09/24

STX Price at posting: 21.0¢ Sentiment: Buy Disclosure: Held
3 Upvote

0 Great analysis

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