Crius Energy Trust Tr Unit CRIUF

RE:RE:RE:RE:RE:RE:RE:RE:Hold tight

[predawn]

What Short Sellers Are on the Hook For

In other words, if a company pays a dividend to shareholders, the second investor who bought the shares from the short seller would get the dividend check from the company. But because the original investor is no longer a shareholder of record (since the second investor owns those shares now), then the short seller must pay the dividend out of his or her own pocket.

Finally, when the short seller decides to close out the short position, he or she buys shares on the open market (from a third investor) and then gives the shares back to the original investor, who closes out the short position and puts everything back to square one.

Sadie222 wrote: The lender is no longer a shareholder in the Computershare records. When you short, the buyer of your borrowed shares takes title in the records. He doesn’t know they are borrowed, and has no reason to care. The lender needs to keep track of his shares and make sure he gets them back. He isn’t lending the div, just the share. When he gets the shares back, he could require payment of the divs earned while the shares were out as well, but the neater solution is just to pay them as they happen.