Replies to post #27897 on Ayala Pharmaceuticals Inc (ADXS)

[fbg0316]

I see your point. I don't think entities that engage in securities lending think of it like that though. I know a lot of pension funds for example blindly lend the shares of all the equities they own to simply earn icremental interest. I agree that if no one lent shares, shorters would have a hard time shorting. For a portfolio as large as Adage, they probably have a policy to lend shares of all their equity holdings to earn interest, so they are not looking more or less at one holding's individual cirmcumstances. Frankly, the "short interest" issue is likely not an issue for the average holding in the Adage portfolio. When they bought ADXS they did not anticipate that the CEO would turn out to be a "value destroyer" attracting the kind of short interest he did. Of course, now, Adage probably views its securities lending of ADXS more strategically in that they know at the right time when positive catalysts come, they can call back their lent securities and help their investment recover from the losses over the last several years.