ERHC Energy Inc (ERHE)

[Julius Erving]

Interesting for the ERHC shorters, and longs:

(A google tranlations from a Dutch article)

Exploding stock price
To be able to short you have to borrow shares and promise to actually deliver them at a predetermined time in the near future. If you have to buy share A at 90 instead of almost zero, you will lose a lot. Sometimes it is the shorters themselves who cause such a price jump.

"That happened, for example, when Porsche raided Volkswagen," says Daalder. “The stock was cut en masse. When the shorters had to deliver, there were simply too few Volkswagen shares for sale. The course exploded. ”

This is called a short squeeze and is a source of exuberant gloating for the many shorthaters when it occurs. This is the risk. And then there are the costs. "A kind of interest for borrowing, plus a scarcity fee," explains Daalder.

Indirect shorting
The latter varies with the availability of the shortened share. "Normally you pay three basis points, but that can add up enormously." In addition, Cees Smit adds: "If you distribute equity dividends while you have borrowed them, you must transfer that to the lender."

https://www.iexprofs.nl/Feature/477464/aandelen/Shortselling-is-even-gehaat-als-riskant.aspx