Replies to post #12529 on Hyperdynamics Corp (HDYNQ)

[Rule_62]

"On average it says iShares ETFs lend 20% of the securities they own"

The case of 95% was not representative, it was clearly an extreme exception.
http://citywire.co.uk/money/blackrock-protects-ishares-etfs-from-stock-lending/a597719

Either way, it's pretty hard to deny that that the lenders are screwing over the shorts by limiting the inventory of shares available to loan. HDY shares have been rated as hard to borrow for months now. Even after the short interest dropped by over 10M shares (which should of resulted in the inventory increasing substantially), they remain hard to borrow. In fact anyone who has been watching the inventory of shares available to borrow can't help but notice that every time the inventory climbs to 1M+ shares, the number mysteriously drops to below 100K. Given the daily volume of late and the percentage of shorting of that volume, it's pretty clear that more shares are being removed from the inventory than shorting activity can account for. By limiting the inventory, the lenders ensure they are able to continue to charge premium interest on borrowed shares.

But hey, nothing wrong with this either. It's all business and who can blame them for making extra interest off the backs of shorts.
Same for when the time comes when they play the other direction and recall those loans. When the members of the Risk Management Association pull the loans, that will just be business too. They're no fools. Holding the number of shares they do the last thing they are going to allow is the shorts to drive HDY into the ground. At some point they'll want their investment back - with a return on the initial investment :)
http://ebiz.rmahq.org/eBusPPRO/Default.aspx?TabId=191&DSResult=T&CommitteeCustomerId=00271892

BTW for those interested, first of all ishares had no holdings in HDY. If you check the 13Fs for Blackrock Inc you can see if the hold shares, puts, or calls.

Blackrock Group: Shares
http://www.sec.gov/Archives/edgar/data/1003283/000108636412002417/blkgroupltd.txt

Blackrock Advisors: Shares
http://www.sec.gov/Archives/edgar/data/1086364/000108636412002415/blkadvisorsllc.txt

Blackrock Fund Advisors: Shares
http://www.sec.gov/Archives/edgar/data/1006249/000108636412002416/blkfundadvisors.txt

Blackrock Investment Managers: Shares
http://www.sec.gov/Archives/edgar/data/1305227/000108636412002420/blkinvmgmtllc.txt

Blackrock Inc: Shares
http://www.sec.gov/Archives/edgar/data/1364742/000108636412002435/blkinc.txt


As for Barclays:

Barclays Global Investors filed for confidentiality as they are being liquidated.

Barclays PLC:
64400 calls
112700 puts
155633 shares


Clearly if Blackrock is lending they have no intention of letting HDY die. They have a substantial capital investment here, and while Barclays holds some, Blackrock hasn't hedged any loaning activity they may have engaged in with a boatload of puts. In other words, there's no doubts in the mind of Blackrock that they will more than recoup their initial investment plus a return.