" It would be a great benefit to the company and its share price if margin lending is available for their shares. "
Only in a non-capitulating market, or if a company hasn't stuffed up.
If the market is falling significantly (eg during GFC), or the company experiences major issues, the existence of margin lending is a huge problem for companies (particularly illiquid companies) as margin calls are triggered resulting in forced selling of stock (if borrower is not able to 'pay' off the margin call which is usually the case).
While this may not look like an issue if you are a long term holder because you expect the company will eventually return to its fundamental value (except where the drop is due to stuffup by company), it can cause massive headaches for smaller companies (and shareholders) if they are required to raise capital since either they will have to raise at much lower rate causing dilution, or they cannot attract capital at all causing a stalling in the company.
It does have a significant benefit in these circumstances for the opportunist (contrarian) investor if the company is sufficiently funded as it allows them to get shares much cheaper than fundamental value.
As for the question, do a quick google search on and you should get some results such as Suncorp Bank offering ML at 40 LVR and Macquarie at 55 LVR. BankSA and MLC too...and therefore probably plenty others.
I didn't realise there were any ML providers on DRM until I did this search...I think this probably explains why it went as low as it did...so I guess I should be grateful :-)
Cdchi1
DRM Price at posting:
73.5¢ Sentiment: LT Buy Disclosure: Held
