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To: Spots who wrote (172)	6/5/1998 10:23:00 PM
From: ftth	Read Replies (3) \| Respond to of 237

Hi spots(edited), I'm not clear why you say the float increases. Here's why I say it doesn't. Example: Mr Blue owns 100 shares of XYZ inc, being held for him in street name in his margin account by broker B. Ms. Green places an order to short 100 shares of XYZ with broker B. Broker B takes these 100 shares it is holding in street name for Mr Blue and sells them FOR Ms. Green to some other investor we'll call Mr Red. XYZ receives notification that 100 shares have changed hands, going from Broker B (they were held in street name) to Mr Red. No new shares are created. THE COVER: At a later date, Ms. Green instructs broker B to purchase 100 shares of XYZ (say they come from Mrs White) and use the 100 shares to payoff the loan from Mr Blue. XYZ receives notification of a change of ownership from Mrs White to Broker B. Broker B is now back at their original position. No new shares are either created or destroyed in the process. Think of certificates changing hands with each purchase. As far as voting rights, you don't expand them. After the short and before the cover, Mr Red has the voting rights for the shares that originally belonged to Broker B F/B/O Mr Green. But Mr. Green MAY request voting rights too. (F/B/O is 'for the benefit of') When voting rights are issued, the brokerage firm is expected to TRY to find voting rights for Mr Green if he requests them. They can do this, for example, out of their inventory, or a portfolio they manage. But unless Mr Green insists, he wont get them. Dividends are different, but I'm assuming you are aware how this is handled since you didn't ask. dh