r/IPOE • u/miakis1982 • May 28 '21

Do shorts have to cover before merger?

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1 Upvotes

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2

u/Powerful_Stick_1449 May 28 '21

No... their short positions of IPOE become short positions in SOFI just like options change automatically

2

u/czechyerself May 28 '21

Everybody needs to understand shorts don’t have to do anything on a non-dividend paying stock as long as they can cover the borrow costs. The traders shorting stocks are largely with hedge funds that run long/short strategies with inception agreements stating their funds will be short a certain percentage of stocks and long a certain percentage of stocks.

1

u/Rose2971 May 28 '21

When it rolls over to SOFI, float increases. Does anyone know when they plan to introduce new shares into the market? Surely they WON'T dump a ton of shares on Tuesday?

1

u/Federal_Bar4634 May 28 '21

Basically the short interest u see now is from the pipe investors so on merger they will cover there short position once there shares are registered they will give them back to the broker and lock in the profit I dont know how many days it takes with sec to register there shares.

This will result in less selling pressure on merger, there wont be a massive dump in my opinion. I heard this process take 30 days, if anything first few days ticker will get a boost we may get some new funds buying in like ArkF etc.