PNV - Chart, page-12484

According to Marketindex we're ranked 380 so the chances of relegation are high. Being in the ASX200 there would have been institutional money - and it wouldn't be too much to surmise that the institutional money is the source of the shorters feedstock.

The market cap of the three biggest companies in the ASX 200 is $678 billion and the market cap of PNV is about $728 million, so the total value of shares in PNV held as part of an index tracking fund isn't going to be significant (compared to the size of the broader market). So what happens if PNV gets booted from the ASX200 and the institutional money want their shares back from the shorters so they can dump them. I imagine the shorters would have to buy them back on market.

Having said that - this is a genuine question that I don't know the answer to. I don't short shares myself so I'm not familiar with the logistics, but I'm sure professional market participants would be aware of the risks -but it is a funny scenario to consider. Imagine if the shorters caused the share price to fall so significantly they forced the company they were shorting out of an index (perhaps even the ASX300) and were then forced to buy the shares back on market due to the short squeeze they created! Too funny.