It's not necessarily the shorting that drove the price down, but it's a reasonable assumption that someone knew the sale was going to happen at a discounted price.gravy wrote:And you also know that there was a load of stock shorting the Friday before the annoncement that drove the RBS share price down?
If somebody dumps a massive number of shares at market price, the price *will* go down. If you know or strongly suspect someone is going to dump, let's say, roughly 13% of tradeable stock in a particular company, it makes sense to short. If someone dumps a massive number of shares at under the current market price, that price is going to fall off a cliff. It makes even more sense to short. It makes even more sense if you happen to know that the company whose price is being driven through the floor is considered "too important to be allowed to fail".
A hypothetical increase in short interest just before the sale was announced would indicate that somebody has ears in the treasury.





