HOW SHORT SELLING WORKS
A short seller is sanctioned by a stockholder in a particular company to sell their shares on condition they replace them with the same number of shares by a certain date. In effect they’re borrowing the shares. They offload the shares when the price is high and buy them back again when the price has dropped, returning them to the stockholder and pocketing the difference.
It’s believed Viceroy produced its report to deliberately create panic so Capitec’s share price would go into freefall. “One can only deduce they wanted the share price to fall so they can benefit from it,” portfolio manager at Denker Capital Kokkie Kooyman says.