Sure. In theory. But in (practise) our case, I believe the shorter is the same entity as the lender (and they own the shares from a lower SP so are "shorting against the box").
They are (in effect) accumulating shares at no cost and will sell those into news I assume.We see it every day with the small sell closes to march down the share price
https://www.asx.com.au/data/shortsell.txtRAC RACE ONCOLOGY LTD FPO 503 161,311,403 .00
On the 24th they (M?) closed the day down 503 shares (short) that they will cover the next day probably. At no lease cost.
Why would they do this if they are not profiting? On paper they know they are depressing their own holding value BUT they will wait for an announcement to optimise their return which is why most announcements get sold into. (They are churning now I expect, no major short position just small share accumulation profits most days)
AND
(Hindsight is 20:20 etc) The problem is - our retail shareholder base have been stretched thin through the $30m CR so there is not the retail support to be able to counter the shorting/insto/broker/trader activity.
In effect ... as RAC haven't used the SPP $30m to either provide news or BB shares that $30m (of ours) has weakened the ability of the retail investors to support the SP. And the instos know it so they have a free hand to play with the SP ... all the time knowing BG has given them a helping hand (he's no shorter but in effect that's what happened) ... wind in their sails etc.
So strategically the CR/SPP was an Achilles Heel for retail shareholders as the money raised has not been used well enough to support growth for the SP.
So it has not been money well invested (yet) and I assume the same man who promoted it (primarily) now wants to avoid a cheap sale that has resulted from the excessive SPP where the funds have not (yet) been used appropriately.
Like I say - hindsight is 20:20 and who was to know that recruitment was going to stall out.
But that's now our reality ... and at least the likely shorter (M?) are also the biggest PR'ers of the stock if you read their newsletters. And our resident seller has run out of ammo it would appear - so we are primed for a run.
I have averaged down considerably, which I assume will work for me - as all the signs are there and the shorter is always covering day to day - so they must be waiting for news.
