Negative short interest rebate
Thus the evidence is consistent with the idea that short sale constraints allow very freebie psd onepage substantial overpricing, and that this overpricing gets corrected only slowly over many months.
Jones and I study a direct measure of shorting costs, coming from the securities lending market.
In essence, the arbitrageur would be buying a security worth at worst worth zero for -63, and would not need to wait very long to realize the profits.On March 2, 2000, 3Com (a profitable company selling computer network systems and services) sold a fraction of its stake in Palm (which makes hand-held computers) to the general public via an initial public offering (IPO) for Palm.In such a market, a stock could be very overpriced, yet if there is no way for arbitrageurs to earn excess returns, the market is still in some sense efficient.In order to borrow shares, an investor needs to find an owner willing to lend them.The magnitude able sweeps calgary ab of the effect is huge, reflecting the fact that this is a very special sample of extremely overpriced stocks that have extremely low returns.
This example is puzzling because there is a clear exit strategy.
Similarly, when you appliances direct online coupon code borrow shares of a stock, you may be charged interest based on the underlying lending conditions of the security in the short sale - primarily the availability of shares.
The "stub value" of 3Com (the implied value of 3Com's non-Palm assets and businesses) was minus.The Palm example shows that for some specific stocks, short sale constraints relating to mechanical problems in stock lending are surely the answer.The investor could buy (say) 150 shares of Palm directly, or he could buy 100 shares of 3Com, thereby acquiring a claim to 150 shares of Palm plus a portion of 3Com's other assets.This possibility leads to recall risk, one of many risks that short sellers face.Write true sentences, positive or negative.