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If the number of share certificates being requested exceeds the number of share certificates existing, how would they do this?
by hlandau 6y ago
If the number of share certificates being requested exceeds the number of share certificates existing, how would they do this?
- JumpCrisscross 6y ago> If the number of share certificates being requested exceeds the number of share certificates existing, how would they do this? When a stock has 140% short interest, there are net 40% of the float of holders who have loaned out their shares. They wouldn’t have the right to certificate until they called back their shares. If literally everyone asked for delivery, you’d wind up with the naked shorts needing to pay up to some of those taking delivery to settle their positions. If everyone refuses to sell, those naked shorts would FTD, and the appropriate processes would take over. Long story short, nothing intrinsic to the DTCC creates net over or under allotment. Companies go private all the time, which is a functional case of all of a company’s shares being taken out of the DTCC.