CUV 15th most shorted company and PNV the 11th most shorted company have quite a bit in common with short attacks. For those of you who don't follow/invest in PNV I have grabbed a selection of the most popular commentary regarding short selling over at PNV from the last couple of days. There is certainly a lot more commentary and popularity over on the PNV threads and something of a short squeeze is starting with the shareprice and market cap more than doubling in just months so it's good to be informed. Here's to two great Aussie Biotechs and thank you to all PNV posters who I have referenced below, I really value your input and everything posted is applicable to Clinuvel who could even be getting shorted by the same hedge fund. Clinuvel used to regularly talk about short selling in their communications but very quite about it these days, plenty of tools at their disposal to protect shareholders from this ongoing attack whenever they desire eg. modest share buyback from exceptional $120 Million cash reserves which are growing at exceptional rate. All IMO DYOR
Ivans51: okay so why is shorting unfair for mum and dad retail well the behaviour as outlined by whytee can be the problem and with our inspector clouseau of a policeman (ASIC) the chances of getting caught or punished are minimal but beyond that their are two big problems that I see for retail in this knife fight firstly it is time line retail generally has a shorter time frame on an investment - there are bills to pay, mortgages to meet etc- whereas the short funds can wait several years to recoup their investments - put simply they can wait you out it is a bit like playing competition chess .. only instead of 2 hours you have1 month to make your moves, and your opponent has 2 years ... guess who wins oddly enough I won many a game of high school competition chess using this tactic of waiting out my opponent secondly the stockmarket as whytee has already alluded to investing in the market is a bit like going to the casino so you (retail) sit down a the poker table with your kitty of $10,000 while the guy next to you (short fund) has a kitty of $1,000,000 ... guess who gets cleaned out ... and to make the fight even more uneven you don't get to know the size of the short funds bet until 5 days after it has happened meaning you can never know if a sudden downturn in the SP is a real market reappraisal or actually just an all in action by the short fund ... sadly by the time you find out it was a fake move your stops have been hit and you are cleaned out and out the door
Ivans51: tutor, you give an impassioned defense of shorting with even more posts to have it seem some clever financial practice when it is not.. it is thievery it is a bet against growth ... a bet which in the end impoverishes us all ... can I call you my good friend?
historically when stockmarkets faces distress the practice is banned or severely curtailed a number of Australian super funds will not lend their shares out for this practice because they consider it unethical and the ones that do like to hide the fact that they do it ... surely this tells you that this practice lives in murky waters
Ivans51: Fleish, I agree that in principle shorting can act to promote market efficiency but at present there is a million mile gap between the holistic principle and the daily practice Firstly there should be transparency ... which we don't have... investors have a right to know who lent the shares, who did the shorting and most importantly the daily net short position announced within 1 day and not the current joke of 5 days... secondly the purpose of shorting in principle should be to detect small pricing inefficiencies and not to drive companies to the brink of financial difficulty... in this context a limit on the percentage shorted or a limit the rate of shorting should exist third the general principle of shorting needs a large market in order to be efficient ... in small markets one or two players can seriously distort share pricing... sadly the best example of this is PNV... a few years ago DW made Phil look a fool... in response Phil spent 2 years and a lot of other people's money to make pnv the fifth most shorted company on the asx fourthly asic needs to get real about policing the companies engaged in this practice and in particular look at how they use media outlets and analysts to create false flags ... flags from which they have set themselves up to profit
ddwn: I don’t care about individuals who short When I refer to sharts, I’m referring to institutions/ professional shorters It’s not an even playing field. These sharts have too many tools at their disposal to organise a coordinated attack on a given company One of my pet gate is no transaction costs when they use HFT and algorithms! Why can’t they put a nominal costs per transaction e.g. $1 - that will stop the silly single digit trades As a retail investor, I have to pay per trading transaction! But, with PNV - that table may be turning So, I’ll gleefully look forward to some short squeezes GL guys
Bill Gates: I'd like to see a referendum from every company ceo to either accept or ban shorting once and for all. After all, the market is supposed to be there to support all listed companies while making a modest profit for themselves.... not this unscrupulous free for all grab for cash which is being used to manipulate companies for the sole benefit of unethical market manipulators and to the total detriment of both companies and shareholders.
BoroBoyinoz: But isn’t that the whole point, you shouldn’t be allowed to “bet” that a stock goes down.I thought this was the Stockmarket where you invest in companies by buying a share in the company and becoming a shareholder.If you think a company is overvalued then you sell some shares that you hold, or if you are a non holder you don’t invest.It is the ASX, it should not be a casino where the actions of high rollers affects the wealth of retail.As you can tell I also hate shorting.
DocMcStuffins: Shorting is great for those who use it to their advantage. But for the average mom and pop investor it can take advantage of their risk tolerance or timelines. And it has the potential to damage companies - if PNV had to raise capital, it could have potentially put its long term survival in jeopardy. And its an Aussie company trying to do some good in the world, so that pisses me off a bit. Just because something exists doesn't mean we can't be upset about it. Because if the right amount of the right people are upset about something, things may change. That being said, users on hot copper have no ability to change anything, but that also doesn't mean we can't winge a bit
Showtime: Some valid comments on the sharters, I guess that's why l never apply stop loss markers - As@ddwnhas pointed out these sharts have no transation costs when they use HFT & algorithms trades so we retail investers just get shafted either way rolling the dice when to get in & when to get out ! This is the game we play.
jevalent: I’m with you! Winge away! Here’s the deal, a market where people buy and sell a specific commodity - a share, an agricultural product, a currency, is ALREADY efficient without the need to introduce an element of artifice.The so called market efficiency supposedly associated with shorting can be implemented more directly with a futures market, as is demonstrated every day in the commodity trade. All short sales do is distort the market, and the only beneficiaries are those for who intend to profit from manipulating that distortion.
whytee: Well legalized "theft" does occur with unfair contracts or with people or organizations that game the system. Sometimes it ends up in court and a judge might decide in favour of the person who lost their money or find that is morally wrong to take financial advantage of someone's naivety but not illegal. IMO betting a stock will go down in the short term is no different from betting it will go up. That's fine. But professional short funds go beyond that by using their resources to effectively influence the outcome in the direction of their bet. They are tilting the roulette table to their advantage, bending the rules without technically breaking them, or if they do break them then they attempt to disguise it so it's hard to uncover. And if they are found out their employer dismisses it as a "rogue trader", even when I suspect it's normal practice and unofficially sanctioned.
whytee: Well gambling isn't illegal in Australia or the US, or or most countries. Investing is often a form of gambling if you are expecting capital growth and hoping for a gain at some time in the future. Where there are capital gains taxes it clearly legitimises the activity as well. And of course short contracts can provide some insurance or hedge that a portfolio will be protected against downturns. So I have no problem with investors being long or short. My disagreement is over the use of resources or tools used by professional short traders to distort the price of particular stocks in the desired direction.
grunter7956: Oh but it provides liquidity don’t forget.What a load of garbage.The single best thing that could happen would be the banning of all shorting in any way shape or form.
UncleFesta: On 11 April in the Talk ya book interview, while discussing the shorts trying to get us out of the ASX200. DW said "Some of those index funds have already gone by the way, because they anticipate we might go out of the ASX200" PNV turnover between say 15 March and the day the shorts closed what they could on removal was 191.5M shares. So... they closed 11.5M shares on the 17th of June, but they added 11.4M shares between the 15th of March and the 17th of June. During this time, the price went from a buck to a buck 30... And if course here we are, up over two bucks. The shorts are screwed; and if funds are buying in anticipation of a December re-entry.... The squeeze wont be comfortable.. they may well be laying under one of these bad boys...
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