Santos is probably the only oil and gas company in the world with an enterprise value in excess of $20 billion that has been crushed as hard by the oil price collapse.
The short sellers have pocketed huge profits partly because the market has held the board and management in contempt. The expectation that poor decisions would be made has played into the hands of those betting against the company.
Santos is one of the most heavily shorted stocks in the top 200 stocks. About 88 million shares have been sold short or about 8 per cent of the issued capital.
One interpretation of this very large short position in Santos is that the institutional shareholder base is sending a message to the board and management about how the company has been managed.
Santos has 1 billion shares on issue and about half the share register is owned by retail investors. These investors do not lend stock to short sellers.
That means that about 20 per cent of the shares owned by institutions are being lent out to short sellers.
That dire situation, however, is being countered by the Woodside proposed offer for Oil Search.
STO Price at posting:
$4.45 Sentiment: None Disclosure: Held
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