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Biotech / Medical : NNVC - NanoViricides, Inc.
NNVC 1.850-2.6%Nov 7 9:30 AM EST
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To: HardToFind who wrote (12659)2/20/2020 6:05:31 AM
From: old 'n cranky1 Recommendation

Recommended By
HardToFind

   of 12871
 
"Does that share count also include the short position in the stock?"

Thanks for asking...although it's a trick question (A short position represents shares that have been SOLD so the person with that position doesn't own shares, they OWE them to someone else. The short interest in a stock is the sum of those short positions.).

I didn't know who had the voting rights myself but this answer makes sense (frankly it surprised me):
"Here's how it works: A short-seller borrows shares from a brokerage firm's stock-loan department. The brokerage gets those shares from the pool of shares used as collateral in margin accounts and/or from investors who have agreed to let their shares be loaned. The short-seller then sells those borrowed shares in the open market, and the money from the sale of those shares goes into the short-seller's account.
No extra shares have been created because the original owner no longer holds them. (They're out on loan, remember?) And the original owner gives up voting rights when the shares have been put up as collateral or willingly loaned out."
thestreet.com
So the holder of the borrowed shares that the short seller sold has the voting rights (according to the above and I don't have reason to think it's not true).

It's a very safe bet that there are TONS of people with margin accounts....some who have NEVER used the benefits of the margin account features (short selling and options trading, for example) and others who forgot that they signed up for a margin account years earlier....who aren't aware that by simply having a margin account they provide their broker the right to lend their shares and IF they are loaned they can no longer vote them. This leads to people wondering why they didn't get their voting materials when everyone else did. The broker never had the obligation to advise them that their shares were out on loan.

So there's a little lesson in there: Even though there is no additional charge for opening a margin account, in certain circumstances there CAN BE a cost in the form of lost voting rights if the broker loans out your shares.
Who knew?

The above is just my understanding based on a couple of minutes of research.

How would you shareholders like me to vote?
(Doesn't apply to me.)
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