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Posted On: 02/03/2018 3:58:05 PM
Post# of 43065
Kudos to AlanC for posting that regarding stock loan borrow. That's an extremely important topic.
The implications are probably not what may investors believe. Most investors believe that short selling is evil and should be stopped. The reality is that if the stock loan borrow program was efficient, PTOI would have been stopped in its tracks before it hit $0.25, much less $7. PTOI investors wouldn't have had the opportunity to lose up to 99.6% of their money.
I'm frequently short and some of my positions are costing me over 100% APR to borrow. That's money that I'm paying but the shareholders who own the shares aren't seeing. Their brokers are pocketing those hefty fees. I remember one 'vegetable-oil-to-gas' CEO bragging that the borrow rates on his company were so high that short sellers were effectively locked out. He was right...but what a horrible claim to fame. Those shareholders lost 99% since that time.
Back when PTOI borrow rates were over 100%, none of you shareholders were getting any of that money either--your broker lent out many of your shares and pocketed the fees while you, as the investors who actually owned the shares, weren't even given any notice that your shares were being lent out. For those of you who held PTOI through the high of $7.00 several years ago, you would have been thrilled to be paid $0.02 per share PER DAY, weekends included, just to lend out your shares to short sellers while those rates lasted.
If or when stock loan borrow becomes more efficient, the PTOIs of the world will effectively cease to exist--efficiency will drive down borrow rates and short sellers will prevent run away stocks like PTOI from becoming hazards for other investors.
The implications are probably not what may investors believe. Most investors believe that short selling is evil and should be stopped. The reality is that if the stock loan borrow program was efficient, PTOI would have been stopped in its tracks before it hit $0.25, much less $7. PTOI investors wouldn't have had the opportunity to lose up to 99.6% of their money.
I'm frequently short and some of my positions are costing me over 100% APR to borrow. That's money that I'm paying but the shareholders who own the shares aren't seeing. Their brokers are pocketing those hefty fees. I remember one 'vegetable-oil-to-gas' CEO bragging that the borrow rates on his company were so high that short sellers were effectively locked out. He was right...but what a horrible claim to fame. Those shareholders lost 99% since that time.
Back when PTOI borrow rates were over 100%, none of you shareholders were getting any of that money either--your broker lent out many of your shares and pocketed the fees while you, as the investors who actually owned the shares, weren't even given any notice that your shares were being lent out. For those of you who held PTOI through the high of $7.00 several years ago, you would have been thrilled to be paid $0.02 per share PER DAY, weekends included, just to lend out your shares to short sellers while those rates lasted.
If or when stock loan borrow becomes more efficient, the PTOIs of the world will effectively cease to exist--efficiency will drive down borrow rates and short sellers will prevent run away stocks like PTOI from becoming hazards for other investors.
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Yes, I understand your penny stock also is the real deal, created with the inventiveness of Edison and destined to be the next Microsoft. Yes, I understand that the delays are also only because your company is making their product and/or technology even more revolutionary.
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