I wouldn't mind betting that those doing the shorting are selling the borrowed shares to themselves. Let' say they have an account called XXX which is the account they use to borrow the shares for the purpose of selling. And let's say they have another account called ZZZ which is a buyer of GXY shares. Let's say that after borrowing the shares, XXX sells them to ZZZ via cross trades. ZZZ is also taking advantage of the falling share price created in part by XXX by buying additional shares on the open market. The beauty of this kind of arrangement is that if the share price starts rising again, XXX can cover by buying back the shares it has sold to ZZZ. The only ones who are missing out by this kind of arrangement would be those who have entrusted their funds to the Fund Managers who loan their shares to XXX in the first place, as they will pocket the few percent they gain for loaning their shares while the real money will be made by XXX and ZZZ. Is this legal? Probably not, but who is going to bring them to account? certainly not ASIC.
GXY Price at posting:
$2.06 Sentiment: Hold Disclosure: Held
