A publicly traded life settlement company executive has roiled the company Yahoo! stock message board by recommending that investors not lend company shares to short sellers.
Brian Pardo, chairman of Life Partners Holdings Inc., Waco, Texas, has issued a letter to shareholders about the topic through the Business Wire press release distribution service.
“It has come to our attention that a major stock brokerage firm is directly soliciting shareholders of Life Partners to ‘lend’ their shares to the firm,” Pardo writes in the letter. “In return, the firm is offering a small fee for this loan. While completely legal, LPHI management strongly urges all holders of our stock not to lend any shares to anyone and, further, to make it clear to your broker that your shares are not to be loaned out to anyone.”
Some speculators appear to have shorted 1.5 million shares of Life Partners stock, meaning that they have acted on the assumption that the price of Life Partners stock would fall sharply, Pardo writes.