careful if you're short. attn gse

I've been shorting NCP but come across this on AFR. So becareful if you are shorting NCP.


The selling pressure on News Corp ordinary and preferred shares ahead of its domicile change seems to have bitten. The media giant has been the dog of the big US media stocks in the past month, down about 9 per cent. Trying to understand the movements of News Corp ordinary and preferred shares is never easy, but the talk on the dealing desks last week was that some of this pressure could turn around in the weeks before the domicile shareholder vote likely in mid- to late October. That's because the three biggest lenders of News Corp scrip to those taking short positions intend to recall all the stock one week before the pending vote. That's presumably so they can vote for or against the deal. Dealers say the total borrowed stock is 300 million shares. If the recall happens, those holding short positions will have to cover their positions by buying back News Corp shares, driving up the price.

Traders in the stock are also reputedly short the ordinary shares and long the preferreds, explaining the narrowing of the spread between the two in recent weeks from 7 per cent to less than 5 per cent, but that might change ahead of the vote.

UBS and Morgan Stanley were thought to be acting for a big local seller in News Corp stock in Australia and the US last week, but the selling may have dried up with the ordinaries up 11¢ to $11.10 on Friday.