Hmm not really. The stock borrower has to reflect the wishes of the asset owner. That is, the long position can ask for the economics of the rights issue to be reflected as if they held the stock and participated in the issue. What that means is that if the lender wants to participate, then the shorter has just sold an additional 1 for 4 at 30 cents and that they now have to cover 125 shares per 100 originally borrowed. Even if every share in the placement when to shorters, 122m shares is less than 203m shares in the rights issue. The shorters will be happy to make money on the existing position, but they come out out square if it trades at its TERP as they lose on the rights. I don't see any reporting of the deal being underwritten but that is not super helpful either way.
Ann: Trading Halt, page-129
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