מאת George:There are two options to short share of other teocelm companies:1.As the newborn teocelm2.As a different entity – as a private person or another companySo,1. Is not really an option you might have to account for that as a liability because you are actually borrowing the stock from a broker (although it will be collateralized by the cash). It can be very problematic because the company probably has a lot of other debt which can be tied to capital structure and certain ratios.Also, it is a directional bet on a behavior of the certain stock, the stock can go up in a short term and you will have to post more cash as collateral, putting some additional pressure on your liquidity. This of course will bring a lot of questions from the shareholders and debt holders. 2.As a different entity, you can squeeze some dollars out of it, but the risk is big.You might face a legal action. The issue is that if you deliberately pursue a strategy which is damaging for the company but very good for you personally, you are not acting in a good faith as a manager and more specifically you are discriminating other shareholders. If another shareholder does not get expected return on investment (and I am talking about something mild here), he might push for the legal action on the basis of misconduct and lack of good faith. If, God forbid, the company runs ashore, you may end up facing the lifting of the corporate veil, because then debt holders and other shareholders as one will pursue you on the same basis.3.You also put some capital of your own into the company and you clearly endanger it if the only aim of the strategy is to support your short position. Overall, it looks like the risk adjusted performance of that strategy (I mean both dumping and shorting) would make it irrelevant.Therefore, I would be very surprised if anyone could really do that on a significant scale due to all the risks. I would expect that only entities who are engaged in this type of the activities would be investment banks that advised on the deal and have the ability, guts and legal backing to do so.

3UKe5LQ9QIcT May 10 2014 6:25pm FLAG