GXY (ASX) Banter and General Comments

Originally posted by Darkstone: ↑

I believe they have not paid MS anything at this point. The services were for the SDV partner assessment process which did not result in a result yet. That is my recollection of the announcement re termination of the process. More interesting is MS's expectation of services in the next three months that suggests they expect to be needed for a deal (SDV Partnership agreement?) within the next three months.

I am not sure it was Morgan Stanley shorting GXY. I thought it was the silver doughnut involved, UBS and Credit Suisse and some hedge fund out of Boston who were identified as the culprits. I thought MS's great claim to infamy was simply their analyst's prediction of an oversupply of lithium. - which kind of turned out to be correct, but not actually lithium and not actually for the reasons they analysed but by a lucky break for them, bottle necks in the supply chain in China about which they were completely unaware - as were we all, and much earlier than they expected, because they were looking at the end of the chain, rather than the middle, and the end of the chain is actually in a shortage because of those same bottlenecks in the middle stages that no one guessed were there. Oh and the fact that the suppply chain has been further disrupted while those same middle stages shut down to expand capacity with upgraded/new plant.

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Another thing to consider when trying to unravel "who is shorting" is that broker/dealers trade as agency or as principal. I think you're being very harsh if you're going to criticise a broker for executing trades on behalf of its customers... You should direct your ire towards those customers that you disagree with their view. Those trading as principal are unclear... Some principal trades are designed as hedges (in the PB synthetic book and/or the derivatives book), but some may be outright shorts and there is no way for an outsider to tell the difference. A bit of sleuthing through public disclosures (such as the analyst disclaimer section of reports) can sometimes tell you whether the broker holds voting stock, and/or synthetic exposure, including short, but a disclosure statement only tells you the state of the world at publication date, so it can get stale quickly. Anyway, if you have the energy to trawl through them, the disclaimer sections can contain little gems.