Simple fact the fund loaning shares to shorters the fund has to own it first. So net change to float is plus1 + minus 1 = 0. Not plus one like many like pout seem to think. Funds can recall the shares loaned on short notice but while the shares are out on loan they cannot sell them. So if they want to sell the shorter has to buy to cover. The equation flips but result is the same. Minus 1 plus 1 Still equals Zero.
The fees for loaning to sorters are high so that adds to the shorters risk and the funds profits. the cost can be astronomical if stock goes up. The only reason to short is you think the chance of stock going down is very high. There are a few others like when SS shorted in advance to cover the sale of shares from Mt K distribution. in doing this they smoothed the market and prevented a large fall in stock price on day the shares hit the market.
Shorts on 5 may 2024 were 59M on 5 August 100M, With the cost and risk involved has any one tried to figure out why shorts are growing so dramatically? Why these people are so convinced stock will go down far more than it already has? I am not saying you should agree with them, just that if you do not understand why, or say because they are evil you are missing a big part of the story. JMO but the change TMM PE after AR is released is a major part of what they are watching. Here is what I see that has caused and will cause price drops
Blame shorters if you want. I think a little research into Lynas failing performance over last two years Prepares you a lot better for the future.
Just for record 5 months ago Analysis had EPS of about 0.20 Then after SAR, Q3 and Q4 they dropped it very fast to 0.08. I think they over corrected a little. My personal guess is 0.10 to 0.12
LYC Price at posting:
$6.09 Sentiment: Sell Disclosure: Not Held
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