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Neither a borrower or a lender be

 I was curious to see the point at which Whitebox started borrowing shares in Tullow, and before I knew it I was plotting the data into a spreadsheet. As I started I wasn't sure what I'd find, but these guys and girls must have deep pockets (or their customers do) as they're in for some serious fines at the library returning their overdue books.. er shares.

It's getting to be an expensive game borrowing Tullow shares. Looks like buying back those 0.24% announced today just cost Whitebox £1.7m. As far as I can tell from looking through 17 pages of history, they first reported their Tullow short on 12 March 2020 with 0.51%. The price at this point was 12.46p

However, we have to track a little further back as they built up their position before reporting. Let's be generous to them and assume that they took out nearly the whole loan on 31st Jan 2020 as news of the potential for Covid was building. The share price this day was 50.82p

As such our starting point is that they borrowed all of their shares at 50.82p and were "credited" with £3.6m. They might have borrowed them at a slightly lower price in which case they would have started with a lower credit balance.

They then borrowed a fifth more to get them to 0.61% on the 18th March at 7.55p (probably thought they were off to the races). The fact that they borrowed another fifth more says to me that they probably hadn't started as early as 31st Jan, and were just getting going.

A further third more and now up to 0.82% on 21st April at 16.28p

Reduced to 0.74% on 5th June at 30.39p (ouch)

Reduced to 0.32% on 8th June at 38.17 (oouchy)

Increased to 0.54% on 20th October at 16.51 (oops)

Increased to 0.65% on 5th Nov at 18.37 (can't get enough)

Increased to 0.83% on 6th Nov at 18.11 (we're winning boss)

Decreased to 0.72% on 24th Nov at 33.82 (not you're not)

Increased to 0.88% on 8th Jan '21 at 33p (I big brave boy)

Increased to 0.94% on 13th Jan at 34p (I am, snif)

Decreased to 0.83% on 10th Feb at 31.02p (lost nerve perhaps?)

Decreased to 0.78% on 15th Feb at 34.25p (close this down)

Deceased to 0.54% on 5th Mar at 50.82p (arggghhh)

Here it is on a spreadsheet (note that I've assumed they spent £4m today, the 8th March to pay off the remaining debt to share holders). They haven't announced this, they still have an unlimited debt.


and here it is on a graph


Over all it doesn't make me want to borrow shares in a company, even as the first whiff of a pandemic appears. They still don't know what they're in for and could be in for at least a £3m loss on an initial "can't lose" idea. I see they've borrowed shares in other companies and wonder where they got the idea to borrow Tullow shares from. You wouldn't want to be that friend who'd first mentioned it at shorters anonymous would you.

This is investment advice* not to short companies, and I don't do that. Please don't bother to do your own research this should be enough to put you off. (*I am joking of course, my legal Lemming dept made me add that.)



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