I think a lot of yesterday's short sales were the underwriters peddling their option shares before they exercise the option to buy at 11.30.
I read some parts of the amended prospectus files yesterday after the close. It says the underwriters can sell short in the open market. It also says short sales up to their allotments are considered covered short sales. Sales in excess of their allotments are considered naked short sales. Hmmmm, the allotment includes an option for 15% of the offering allotment.....exercisable within 30 days at the net price to the underwriters which is 11.30.
So, they sell short at, say, 12.26 and they have the remainder of their 30 days to cover at the option price (11.30) or the then market price if it happens to be lower than 11.30. Nice deal on top of 35 cent discount to the 11.65 offer price.
So yesterday's short volume could very well have been our friendly bookrunners locking in a minimum profit between yesterday's short sell price and 11.30.....already knowing their maximum cover price.
The spinoff will be in the form of a (non-taxable) dividend. So short sellers will have to pay that amount. However, as with any other x-div date, NRF common will trade down by the corresponding amount.
What short positions are not considering (or willing to believe) is the dividend growth and the accretive capital raises. Shorts seem to have the opinion that they are always smarter than everyone else. I don't have any sympathy for someone who losses a lot of money on shorting any stock.
I never short, but it would seem so. The shorts would owe their brokers whatever the brokers would have had they held through the spin .... seems to me. Also, shorts pay dividends if they're short the day before Ex-D.