Scrip lending done by a large institution is a way of offsetting their custodian costs. The fund manager doesn't tend to do it, their client does, usually on a whole portfolio basis. So a large client might have 5 fund managers working for them but the client holds all positions centrally with one custodian. The custodian charges a fee for their part of the process. To offset this fee the client will do a deal with, say UBS, to lend their stock out. UBS will pay them a fee for this. The insto fund manager doesn't necessarily even know what has been lent. Will only find out when a corporate action takes place, like an AGM vote or a dividend. Otherwise it makes no difference to the day to day management of the portfolio. The fund manager is free to sell the stock, it just gets called back, maybe not even from the original borrower. (which is why I roll my eyes at all these conspiracy theories around manipulating prices). There may be variations on this model, but it's the most common reason to lend stock. (free money).
PET Price at posting:
$1.05 Sentiment: Hold Disclosure: Held
(20min delay)