You saying PP holders of RRL, can't borrow someone else's RRL stock supplied by Canacrap or whoever to sell short, and lock in a profit, using their restricted PP stock as collateral. Perhaps with a small float, the broker would not do it, because the original holder might want it back to sell it themselves, but brokers like Canacrap likely have an inventory of it. If the stock goes up during the time before the restriction is lifted, Canacrap could force the PP holder to put up some money to protect the short, perhaps using margin so they win two ways,...capital gain on the stock after restriction is lifted, and interest charges during the restriction period. If the stock goes down, Canacrap can force the PP holder out of the short by demanding the stock back. They still get commissions and interest charges on the short loan. Bigger gain to Canacrap if the stock rises, losses can be quickly covered if need be.
Different people say different things on this topic. Brokers I've talked to say different things.
I'm very confused. |
