To really hit the shorts where it hurts I have long wondered why...

To really hit the shorts where it hurts I have long wondered why heavily shorted companies don't go on the offensive and use rights issues to weed out the short sellers. As I understand it short sellers are responsible not only for dividends but also for rights. If PLS offered a $1 a share dividend and a right of one new share for every 5 held to be exercised at $5.00. Genuine long share holders end up with one extra share per 5 held, no new cash outlay (covered by the dividend) and the franking credit as a bonus! The company cash position is virtually unchanged. There is probably some rule that prevents this action, but it's an interesting thought.