tanon, what is the latest info on AA shorting Igas? When I...

tanon, what is the latest info on AA shorting Igas?

When I looked into it it didn't seem that way at all. He used a very large number of igas shares as security to borrow around 400k to buy 300k more igas shares at 1.30 (the higher risk nature of igas likely the reason why so much security was needed for the loan). I crunched the numbers and for him to come out ahead if he defaults the SP would need to go below 0.05, and even then, the borrowed money was used to buy more igas shares, so he wouldn't actually be walking away with anything, i.e impossible for him to gain from a reduction in igas SP.

Quindell directors borrowed larger $ relative to number of shares used as security ("Equities First had paid a sum equal to 67% of the three-day average market value per (Quindell) share less a financing arrangement fee of 3% for the shares transferred as security for the loan and bought a small amount of extra shares, using most of the borrowed $ for undisclosed purposes.") Therefore for them, the SP drop (1.25 to 0.45), meant it did not make sense to pay loan back and regain ownership of the shares used as security.

AA used 7.5m shares to borrow 400k GBP, i.e 4% (compared to 67% for Quindell!!!), of the value of shares used as security, and used it ALL to buy more (compared to Quindell directors who only bought a small amount of extra shares, pocketing the rest) .

In AA case, it is not shorting, it's actually showing massive confidence in Igas SP.