Q: Is Well Health Technologies the most manipulated stock in the Canadian market? I use Wealthsimple for several accounts and activated their "stock lending" option where they give you a yield on borrowing your shares. Their example target is 4.5% for shares borrowed. I could see the short attack on Well beginning like clockwork, 1 week before last quarterly release, as my shares were lent out more each day. I started getting 6% yield and that was ok. But that went down more and more with each "short", until I was loaning out all my shares for a measly 0.2%. I contacted the brokerage multiple times and they stated "market demand" and "fluctuations". Clearly 0.2% was not part of the deal and certainly not worth the risk. I obviously canceled this borrowing feature. What is this trickery? They are literally giving away shares to shorters as a means to suppress the share price. This has ONLY occured with Well:ca. How do they get away with it?
5i Research Answer:
It is difficult to extrapolate on a single stock at a single broker. With any broker than shares its lending fees (such as WealthSimple) there is going to be more available stock, and with more supply short rates are going to decline. Other brokers may have less supply and higher rates. The short interest in Canada is 1.77% and in the US only 0.79%. We would not consider these amounts really significant enough to cause high lending rates. While not doubt some shady stuff occurs in the industry, we would not simply assume it is commonplace on single data points.