Thanks for your thoughts, antibody. I can sympathise with MSB shareholders being frustrated at not understanding movements in the share price and so I thought I would provide some colour.
But I have to say that I respectfully disagree with your comments on shorters being "the most ugly of market corruptions".
While I do not short-sell myself, I think shorters are no different to normal participants: just like "conventional" investors by and sell shares, shorters do as well, but just in reverse order.
In fact, the very reason MSB's stock price rose so strongly in late August is, you will probably find, because of forced shot-covering following a recall of stock.
So don't forget, just like the AMP or Perpetual or Capital is sometimes a buyer of shares and sometimes a seller, so too is your average short-seller.
And shorting is not jsut a modern phenomenon: it has been a feature of capital markets for a very long time: in the Tulip and South Sea bubbles there were accounts of canny investors who profited by entering into derivative contracts which required some form of selling in order for them to be satisfied.
In response to your lament: "(Is) Australia going to foster market confidence, new industries, new investment, new biotechs?", bear in mind that the US is the world's most vibrant and innovative economy, leading the world in new industries, new investment and new biotechs.
And yet shorting is rife on Wall Street.
So shorting is no obstacle to progress, innovation and wealth creation.
As a case in point, take Resmed, which has for years been heavily shorted through its Nasdaq-listing, and yet that share price has risen at a compound annual growth rate close to 20% pa for the better part of two decades. (Currently 20% of RMD's US-listed equity capital is shorted.)
Many other stocks have been shorted aggressively at various stages, and yet that has not stopped them creating significant value for their shareholders. Here I'm thinking of the major banks, CSL, WES, WOW, SHL, RHC, AMC, CTX, TLS etc.
(The banks were heavily shorted during the GFC and yet they have turned out to be sensational investments in the subsequent 5 years. WES, too was shorted to buggery when it bought Coles, now the market is singing its praises. And TLS was one of the most shorted stocks in the market below $3.00 when Sol Trujio was at the helm; and yet I went on to more than double (almost triple when all the subsequent dividends are included.)
So I think you are misguided in your lambasting of shorters.
They are proven to be ultimately irrelevant.
Personally, I like shorters, because I know that at some stage they have to cover their positions.
Remember, today's shorter is a potential buyer down the track.
Adam
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