As far as I’m aware, voting rights transfer to t
Post# of 154898
(Total Views: 395)
Posted On: 05/17/2025 7:07:12 PM
Re: Carsmax177 #153163
As far as I’m aware, voting rights transfer to the buyer of the shares sold short not the borrower (short seller). I went down a rabbit hole on this, so if I’m wrong, someone please chime in.
Still, it seems a little crazy! Not only do you lose your voting rights when you lend your shares, but those rights end up with someone else entirely the new buyer. Like, what? That led me to think, why would anyone allow this? And why does it matter?
It could actually be crucial during mergers, buyouts, or activist fights where voting power matters.
It’s subtle, legal, and one of those lesser known tactics used in M&A or takeover plays. If enough shares are lent out and sold, the new owners of those shares, not the original long holders, end up voting, possibly in favor of a bad offer.
Especially in a stock with a tight float or passive institutions, this could tip the scale but this isn’t us imo. That’s how you could see a low ball buyout get approved, even if many original shareholders would’ve voted no if they’d actually had their votes.
I feel like there’s too many retail investors to overcome in this situation.
I don’t think this is happening right now, but it’s odd and definitely got me thinking.
That said, I think more than anything, shorts are just stuck or doubling down on their own stupidity and it looks like it’s going to blow up on them come Monday when there will be very few shares available.
Does that make sense or am I lost in the sauce.
Still, it seems a little crazy! Not only do you lose your voting rights when you lend your shares, but those rights end up with someone else entirely the new buyer. Like, what? That led me to think, why would anyone allow this? And why does it matter?
It could actually be crucial during mergers, buyouts, or activist fights where voting power matters.
It’s subtle, legal, and one of those lesser known tactics used in M&A or takeover plays. If enough shares are lent out and sold, the new owners of those shares, not the original long holders, end up voting, possibly in favor of a bad offer.
Especially in a stock with a tight float or passive institutions, this could tip the scale but this isn’t us imo. That’s how you could see a low ball buyout get approved, even if many original shareholders would’ve voted no if they’d actually had their votes.
I feel like there’s too many retail investors to overcome in this situation.
I don’t think this is happening right now, but it’s odd and definitely got me thinking.
That said, I think more than anything, shorts are just stuck or doubling down on their own stupidity and it looks like it’s going to blow up on them come Monday when there will be very few shares available.
Does that make sense or am I lost in the sauce.
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