ScripsAmerica Inc. (SCRCQ)

[coolerheadsprevail]

Couldn't IR short stock using its convertible preferred received from SCRC as back-up?

What do you mean by "using preferred as back-up"?

If you are asking whether they could borrow their own convertible preferreds in addition to borrowing their own common, then I believe the answer is "no". Of course, as I stated in my prior post, this is ONLY presuming that there is even a way to borrow your own shares.

Remember, in shorting, you are borrowing shares to sell immediately and then you have to buy them back (hopefully at a lower price than what you sold the borrowed shares at) and return the shares to the person you borrowed the shares from. These shares have to be the same class. If IR "borrowed" its own preferreds, then good luck to them trying to find a market to sell them to. And then they would need to somehow find more of these preferreds out on the open market to buy in order to return the shares to itself. Preferreds are a completely different market than common stock -- and I highly doubt that there is even a market for preferreds to begin with. In essence, you can't short preferreds and then buy back commons to return to the person who loaned you the preferreds.