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Strategies & Market Trends : Roger's 1997 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: Carl H. Gotsch who wrote (7067)	11/16/1997 6:58:00 AM
From: ref	Respond to of 9285

Carl, Roger, Pancho - RE: the ORG dividend. Please pardon my ignorance. If ORG announces a dividend in the form of stock, does a short holder owe the stockholder from whom the shares were borrowed these shares, thus reducing one's net whenever one closes the position(assuming the stock price really falls), or does this dividend indeed function just like a split, which just serves to increase the size of one's short position? I have been lightly burned by having to pay dividends awarded out of my cash reserve, and understand this process fairly clearly. I think that I recall DNA offering a dividend in the form of shares rather than cash when the stock price was on the way down, and I think that this resulted in my buying more shares to cover when I closed the position than the number of shares originally shorted - so that it functioned the same way as a split, as you suggested, but I'm not sure that I correctly interpreted the mechanics of the process. Thanks in advance for any clarification.Dick.