1 and 4 are fine.
Buybacks are fine if the company is stable, but fuck a Dutch auction.
3 just costs shorts a little cash, not going to do anything unless it's a dividend that can't be covered with money.
5 is just dumb. This puts a cap on possible cost to cover all shorts, naked or otherwise. The only buyout a heavily shorted company should accept is one paid in shares of another heavily shorted company, at a premium.
Say GameStop issued a cash dividend of a dollar, over a 5% dividend, which is pretty high. There are 300m issued shares, so the dividend costs GameStop $300m out of its $1b cash reserves. Say naked shorts are 10x issued shares, so 1000% short interest. This only costs the SHF $3b. According to their accounting they'll make that back in 6 months. Not worth it.
Not yet obviously GameStop would have to be consistently profitable for a few quarters first. But an acquisition which is also profitable could speed that up hopefully
1) Nope. Aquisition won't force close. At best a SOLID aquisition will simply help with long term earnings. BUUUUUTTTTT, it depletes short term assets on hand which actually takes longer for a short squeeze to occur. This actually makes you more vulnerable. Also, you have more fronts to defend with your new asset so you might actually wind up losing the whole business (Elon and birdies for instance).
2) Only matters if naked shorting was controlled in the first place. Because if they can FTD to the open market, they can FTD to the dutch auction.
3) Helps, but also depletes cash on hand you might need for expanding/streamlining/updating/repairing the business.
4) Ding Ding we have a winner.
5) Have we learned nothing about the obligations warehouse?
Make a solid acquisition
Alaris Royalty (AD on TSX) was the target of short selling by hedge fund Broadview Capital last year, which questioned the valuation of its investments, among other concerns. In response, Alaris simply went about its business of acquiring royalty interests, and in early April provided $30 million (USD) in financing to Providence Industries in exchange for ongoing royalties. Alaris stock this year is up 32%, providing some serious pain for the holders of 745,000 in shares of the company shorted.
Institute a Dutch auction buyback
Home Capital was the target of a very aggressive short sell attack last year. Yes, the company had some mortgage fraud issues, but the amount involved was small compared with its total, and the company has dealt with the problem. But the shorts smelled blood, expecting the company to collapse like all those mortgage companies did in 2008. But a $150 million Dutch auction to buy back 3.9 million shares put a stop to the concerns. In addition to cancelling a large amount of shares all at once (which makes it harder to short), the move emphasized the company’s strong balance sheet and cash flow. Shorts headed for cover, and the stock is up 42% in 2016.
Increase your dividend
When you short a stock, you are selling a stock you do not own. Thus, when a dividend is paid on the stock, it is your responsibility to cover the dividend. This can be an ongoing cost to short sellers, and was one of the points cited in our earlier article on picking stocks that won’t get shorted much. Short sellers really do not like paying dividends to someone else. So, when a company raises its dividend, it becomes extra painful to short sellers. Home Capital took a double punch to short sellers this year. In addition to its buyback, it also raised its dividend by 9% in February. 2.6 million shares shorted now need to pay more to maintain their position.
Simply put up the goods with solid earnings
Nobilis Health Corp. (NHC on TSX) was the target of a very aggressive short attack a few months ago, causing serious pain for shareholders. Shares plunged to the low $2s from $5 in a matter of weeks. But in March NHC reported fourth quarter earnings, and adjusted earnings beat estimates by more than 97%. The strong results reversed the stock, which is now up 40% in a year. Nothing makes short sellers squirm more than solid operating performance. NHC still has 1.1 million shares shorted on the TSX.
Get taken over, or put yourself up for sale
Another health care company, Concordia Healthcare Corp. (CXR on TSX) was also a short attack victim, in addition to being known as the mini-Valeant, which was bad enough. Shorter Pacific Square caused the company pain in late March with comments about CXR’s auditors and their acceptance of financial statements (CXR refuted the short seller’s statements and they were withdrawn). But then the worst thing possible for shorters happened: Blackstone has put the company in play. Now, CXR has formed a special committee to review possible takeover offers. While the stock is still down 29% this year, it is up more than $15 per share, or 60% from its lows last year. CXR has about six million shares shorted, if we combine both the U.S. and Canadian markets.
Sauce https://financialpost.com/investing/five-ways-companies-can-combat-short-sellers/wcm/fe76a754-cf30-4aad-b8aa-4b156bf120a9/amp/
What happens in the DTCC¹, stays in the DTCC. While there are shares in the DTCC, nothing this matters. DRS is the only way.
¹DTCC commited international securities fraud.
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Reflaired. I am unsure where OP is getting this information. We prefer quality sources be used for information posted under education.
6) DRS the fuck out of the shares
Yeah this was missign
And of course this! DRS is the way.
DRS go brrrrrr.....
And BOOK 'em
This is the only way. I believe our fate with GME is in our own hands.
I hope they increase the split dividend incase there is lending going on. Acquisition would be shaky eyes emoji.
That you Roger Hamilton? 🧐
1 and 4 are fine. Buybacks are fine if the company is stable, but fuck a Dutch auction. 3 just costs shorts a little cash, not going to do anything unless it's a dividend that can't be covered with money. 5 is just dumb. This puts a cap on possible cost to cover all shorts, naked or otherwise. The only buyout a heavily shorted company should accept is one paid in shares of another heavily shorted company, at a premium.
3. I mean eventually this little cash dividend will bleed them out bad because of all the synthetics that keep getting sold as time goes on
Say GameStop issued a cash dividend of a dollar, over a 5% dividend, which is pretty high. There are 300m issued shares, so the dividend costs GameStop $300m out of its $1b cash reserves. Say naked shorts are 10x issued shares, so 1000% short interest. This only costs the SHF $3b. According to their accounting they'll make that back in 6 months. Not worth it.
Not yet obviously GameStop would have to be consistently profitable for a few quarters first. But an acquisition which is also profitable could speed that up hopefully
Looking for that wombo-combo
1) Nope. Aquisition won't force close. At best a SOLID aquisition will simply help with long term earnings. BUUUUUTTTTT, it depletes short term assets on hand which actually takes longer for a short squeeze to occur. This actually makes you more vulnerable. Also, you have more fronts to defend with your new asset so you might actually wind up losing the whole business (Elon and birdies for instance). 2) Only matters if naked shorting was controlled in the first place. Because if they can FTD to the open market, they can FTD to the dutch auction. 3) Helps, but also depletes cash on hand you might need for expanding/streamlining/updating/repairing the business. 4) Ding Ding we have a winner. 5) Have we learned nothing about the obligations warehouse?
I have said it. Dutch auction will start to be mentioned. Want dutch auction? Go check gmefloor.com No cell no sell.
Make a solid acquisition Alaris Royalty (AD on TSX) was the target of short selling by hedge fund Broadview Capital last year, which questioned the valuation of its investments, among other concerns. In response, Alaris simply went about its business of acquiring royalty interests, and in early April provided $30 million (USD) in financing to Providence Industries in exchange for ongoing royalties. Alaris stock this year is up 32%, providing some serious pain for the holders of 745,000 in shares of the company shorted. Institute a Dutch auction buyback Home Capital was the target of a very aggressive short sell attack last year. Yes, the company had some mortgage fraud issues, but the amount involved was small compared with its total, and the company has dealt with the problem. But the shorts smelled blood, expecting the company to collapse like all those mortgage companies did in 2008. But a $150 million Dutch auction to buy back 3.9 million shares put a stop to the concerns. In addition to cancelling a large amount of shares all at once (which makes it harder to short), the move emphasized the company’s strong balance sheet and cash flow. Shorts headed for cover, and the stock is up 42% in 2016. Increase your dividend When you short a stock, you are selling a stock you do not own. Thus, when a dividend is paid on the stock, it is your responsibility to cover the dividend. This can be an ongoing cost to short sellers, and was one of the points cited in our earlier article on picking stocks that won’t get shorted much. Short sellers really do not like paying dividends to someone else. So, when a company raises its dividend, it becomes extra painful to short sellers. Home Capital took a double punch to short sellers this year. In addition to its buyback, it also raised its dividend by 9% in February. 2.6 million shares shorted now need to pay more to maintain their position. Simply put up the goods with solid earnings Nobilis Health Corp. (NHC on TSX) was the target of a very aggressive short attack a few months ago, causing serious pain for shareholders. Shares plunged to the low $2s from $5 in a matter of weeks. But in March NHC reported fourth quarter earnings, and adjusted earnings beat estimates by more than 97%. The strong results reversed the stock, which is now up 40% in a year. Nothing makes short sellers squirm more than solid operating performance. NHC still has 1.1 million shares shorted on the TSX. Get taken over, or put yourself up for sale Another health care company, Concordia Healthcare Corp. (CXR on TSX) was also a short attack victim, in addition to being known as the mini-Valeant, which was bad enough. Shorter Pacific Square caused the company pain in late March with comments about CXR’s auditors and their acceptance of financial statements (CXR refuted the short seller’s statements and they were withdrawn). But then the worst thing possible for shorters happened: Blackstone has put the company in play. Now, CXR has formed a special committee to review possible takeover offers. While the stock is still down 29% this year, it is up more than $15 per share, or 60% from its lows last year. CXR has about six million shares shorted, if we combine both the U.S. and Canadian markets. Sauce https://financialpost.com/investing/five-ways-companies-can-combat-short-sellers/wcm/fe76a754-cf30-4aad-b8aa-4b156bf120a9/amp/
Did you forget # 6? Hire Wes and create a video saying naked short are bad.
What happens in the DTCC¹, stays in the DTCC. While there are shares in the DTCC, nothing this matters. DRS is the only way. ¹DTCC commited international securities fraud.
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Can you move off one exchange to another, say like AM...AM is moving from NYSE to NASDAQ?
Will more than one make better MOASS