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Non-Tech : Any info about Iomega (IOM)?
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To: jwk who wrote (10186)10/26/1996 7:33:00 PM
From: Phil Tran   of 58324
 
>>What the short seller does *own* is an obligation to go to the market and purchase the same number of stocks which they *sold* when they became a short *seller.*

There are not two shares where there was one. And there are not two *owners* of a stock. There is one *owner* for each share no matter how many people have *promised* to buy a certain number at some time in the future. This impacts the demand side of the market, never the supply.<<
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Jack:
Now you have lost me.

>>There are not two shares where there was one<<

But shorting does create "two" shares. If IOMG pays out dividend (assuming we are in a one-IOMG-share world), then IOMG pays it to the new IOMG shareholder who bought the share from the shorter; the shorter has to pay out of his own pocket the dividend amount to the original shareholder from whom the shorter borrowed the share. In this way, it seems like there are "two" shares.

But there is only one shareholder with the voting rights. I forgot how this works. Maybe one of you guys (Jack or Allen) can take a shot. I really should read my Investments text again.

I somewhat agree with you Jack, in that shorting "impacts the demand side of the market, never the supply."

Phil
(who has a sizeable short position, and is glad that IOMG does not pay out dividend.)
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