Home Capital Group Inc T.HCG

why down today?

[HermannHaller]

Was someone disappointed they didn't raise the range? The offer expires tomorrow, some brokers required instructions as of Friday. Even with today's drop, currently at $28.85, it's still above the range, suggesting little to no shares will be tendered. Which means they will have to come back again with a new SIB.

[wildrunner11]

wondering if it might have been in the shorts interest to keep the stock price above the max of the SIB price till after the tender period to keep more shares out. If shareholders were to tender then it could have caused some of the shares sold by the shorts to be called.  from canader "short update" the shorted has increase significantly in the past 6 months. 

[HermannHaller]

It seems likley the shorts are playing some game here with the timing of the SIB. Perhaps as you say they wanted the share price to stay up, so the SIB would fail, and now today they are shorting again. But I can't really understand how that helps them. Ultimately, the company is over-capitalized and wants to return $115 million to shareholders. So maybe another SIB, or new NCIB, or special

[wildrunner11]

  From what I understand it would help the shorts a lot, not having any shares bought back. If you own shares in a margin account, a brokerage firm will let your shares be borrowed and sold for a short position. (I understand this is not possible from a cash account) So, if you are one of these: a) a person whose shares were borrowed and sold the second person, or b) the second person

[HermannHaller]

I understand your point, but if the company then just announces a new SIB with a higher price range, the shorts still get hit. Their strategy of 'not having any shares bought back' seems a very short term reprieve.  We'll likely get a press release Wednesday morning. My guess is maybe $20-30 million worth of shares are bought at $28.60, and the company will have to say something

[wildrunner11]

Agree with the short term thinking.  with the interest rates going up and Canada having one of the most expensive housing markets, they are probably expecting our housing prices to crash. I see a decent correction but with all the new mortgage rules in the past few years it has put a nice buffer to protect the banks.  yes, will be interesting to see how many shares tendered and what