Re: Buyers need sellers....why I think delivery failures are important
in response to
by
posted on
Nov 09, 2019 01:08PM
I love the idea of putting the screws to short sellers....my Christian faith notwithstanding I have to admit that I am not immune to the sentiment called schadenfreude, the malicious enjoyment of another's misfortune.
With that being said I recall about 3 years back (maybe 4) I instructed my broker to move, (I think it was 5,000) shares from my open account to an RSP (thus registered) account. I remember it taking several days, longer than a week. Shares in a Registered Account (RSP/TFSA) are not marginable and thus are not available to be shorted.
I suspect that if Brokers were hit with a decent sized number of such moves...involving a signficant number of shares, I imagine they'd simply drag their heels waiting for things to balance out before complying with the requests.
Years back I remember seeing "Certificate Calls"...or Cert Calls for short. Investors were exhorted to contact their brokers to demand physical delivery of their share certificates. I honestly don't think they ever amounted to much....typically they were for companies like Enron, Worldcom, Nortel and the like. Ultimately stocks are about supply and demand....whether a compnay is garbage or gold, if buyers swamp sellers the price can explode regardless of fundamental realities.
I make no pretense to having read everything on short selling, but I have read a lot. And frankly I don't think there's much that can be done, even by a large group of retail investors.
Here's a post from June of 2018 I did when RVX started showing up on the Buy-In list that time..
And if you want, take a look at what happened to the stock in the weeks and months that followed....it was pretty explosive.