A theoretical question for @macrocephalopod and any other quant practitioners such as @sajidnizami -- would you consider shorting companies with high equity dilution a carry strategy?
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... and was likely to keep issuing stock, then shorting it could be a carry trade as long as the financing cost (which in this case would mostly be borrow fees) was not too high. In practice companies which are heavy issuers of stock are generally doing it to finance growth ...
... or to pay a dividend so the condition “no dividend or earnings growth” is unlikely to be met, and if if it is met, the company would be such an obvious short that I would expect borrow fees to be high enough that carry would be negative. So it’s quite a theoretical exercise!
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Thanks. Twitter will use this to make your timeline better. UndoUndo
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Ah Mr Octopus, allow me to show you to my friends in the Permian Basin
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Hah, shale and utilities were the two sectors I was thinking about here. Ok the case of utes they are issuing stock and using the cash to pay dividends but not sure about shale!
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