(21-11-2022, 11:18 AM)specuvestor Wrote: Short selling sounds sexy but very asymmetric. They don't even get 100% return cause when stock is suspended it will be a borrowing rate or cover position nightmare... hence sometimes stock dead cat bounce when it is going to suspend as short sellers scramble to cover.
I wondered if this is the case for what happened to Best World when it finally returned from suspension, ie. the price shooting up on the 1st day of trading can be attributed to shortists covering their shorts after paying the borrowing costs for last few years...
Carson Block's epiphany may not be too late after functioning for the last 10 years as an exclusive short seller. Maybe converting to a long-short net hedge fund is the best...
(21-11-2022, 11:18 AM)specuvestor Wrote: The other problem, perception or real, with short sellers is that they create fear on trust and hence creditworthiness which even a perfectly good company with leveraged business model cannot survive. Corollary is that an unlevered company is not afraid of short sellers.
The MW-Olam saga actually suggests that while on aggregate, Olam with a leveraged business model is affected but eventually if the company is really good, a white knight (in this case, Temasek) will step in. In the grand scheme of things for Olam shareholders, it might not be a bad thing because we could argue Olam is more "anti fragile" now (Again, we see such unintended consequences coming out as 2nd order effects)
I am not a certified financial advisor and so nothing of what I say should be construed as financial advice. Please consult a certified financial advisor for advice instead.