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Company Lends Stock to Bank. Bank Shorts Stock to Company's CEO. Any Questions?

Matthew S Levine
Company Lends Stock to Bank. Bank Shorts Stock to Company's CEO. Any Questions?

Intrexon Corp. is a $1.9 billion market-cap biotech company that issued $200 million of convertible bonds last week. The way convertible bonds work is that they are bonds that can be converted into stock: You sell them for $1,000, and at the end of (in this case) five years investors either get a fixed number of shares of stock (if the stock is up more than a certain amount over those five years) or just get their $1,000 back. If short sellers are already selling a lot of a company’s stock short, then there may not be much stock left to borrow.