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Technology Stocks : Globalstar Memorial Day Massacre
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To: Maurice Winn who wrote (141)5/12/2000 7:12:00 AM
From: Michael Allard  Read Replies (1) of 543
 
About a year ago I received a call form my SSB broker telling me that the brokerage house was desperately seeking GSTRF shares to short. It actually sounded like they were scrambling to find them because they had over-shorted. They offered me 6%/year on my GSTRF balance (paid monthly) id I would allow them to use my shares to short. They sent me paperwork to transfer the shares to a separate account, and paid the 6%. About 3 months ago, I received a call saying they did not need my shares as badly anymore, and are cutting the rate to 3%. I've never had this happen with any other stock I've owned.

A couple of points:

1. - Obviously there has been a short supply of shares to short if SSB is willing to pay for the rights to borrow against GSTRF.

2. - In a squeeze, could brokers just make the same offer to the masses to free up the shares (to counter the Memorial Day Massacre).

3. - Maybe many others have allowed their shares to be short (for the 6%) again inflating the typical short position?

Completely coincidentally, and without regard to any activities discussed on this or any other board, and out of my own free will, and holding no person harmless, etc. etc.. I will be removing my shares from this account on May 25th.

Good Luck to all!
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