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Technology Stocks : Xylan
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To: Anthony Tran who wrote (3479)11/21/1998 8:23:00 PM
From: Don Pueblo  Read Replies (1) of 4135
 
I hate to see shorter use my shares to screw me up.

Gary Korn is right; check with your brokerage and inquire if having the shares in Type 1 is adequate insurance. It probably is. There are two other factors you should be aware of:

First, having the certificates might be a potential snag should you want quick liquidity. Probably not, but might.

Secondly, the truth is that unless you own about 10% of the float, shorters will find stock to short with or without your shares. Shareholders (some of them large) that have shares in Type 2 accounts at the large brokerage firms supply ample liquidity for any stock that does not have a very small float. Day traders may occasionally have a short term influence on a stock by shorting it, but the "damage" is done by the big players, and they can usually find stock if they want to.

Remember also that there are two sides to every round turn, and anyone that is short the stock buys it back at some point, and not always for a profit.
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