Short term speculations with shorter's in mind for TFC, page-119

From AFR today - good news seems there are no more shares shorters can borrow!!

Australia's community of short sellers is ablaze after US based research unit Glaucus Research published its $0.00 price target on TFS Corporation.

Australia's community of short sellers is ablaze after US-based Glaucus Research published its $0.00 price target on TFS Corporation.

The WA sandalwood company company ceased to exist as it was known as of this morning – that's because it has a new name - Quintis and a new stock ticker QIN.

But anyone hoping to act on the inspired piece of research will be left disappointed.

Hedge funds that rang up their prime brokers in the past 48 hours to put on the trade were all met with the same response – there are simply no shares available to be loaned out.

One broker reported that there was no liquidity in the stock while another said the news release prompted interest that couldn't be fulfilled as there was no borrow available.

Why? Because it is already the fifth most shorted company on the ASX – measured by a percentage of outstanding stock loaned up to borrowers.

The total shares loaned up has steadily picked up from 20 million to 60 million over the past 12 months.

At the moment though there's nothing out there for those wanting to act on the Glaucus report, be it piling into a new idea or adding to an existing position. The "borrow pool" is empty.

That's frustrating, from the perspective of short-sellers, as the stock has fallen about 25 per cent this week.

While the local community of short sellers were impressed with the extensive report, they pointed out that TFS has long been a "consensus short" that has been openly doubted for years.

And they're less than impressed about being told to go out and do something that can't be done.  

Glaucus is not the first firm to question the sandalwood grower. TFS sued Taylor Collison over a report by Adam Dellaverde which it said was deceptive, misleading and damaging to the company. The judge ruled in favour of Taylor Collision.

But there's no denying that Glaucus's brazen and outright US style attack which will add a bit of spice to the capital markets and keep executives on their toes.

For its part, the freshly-minted company put forward its defence on Thursday morning. In response to an ASX speeding ticket, it said Glaucus' note was self serving, contained inaccuracies and reaffirmed guidance.


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