Overview of Equity Portfolio Management (2025 Level III CFA® - Reading 14)

[@ditshegomosienyane7252]

Short selling is not yet available in Botswana but I wanted to know who pockets the dividend during the time a stock is “shorted”?

[@arnoldachiri4810]

1) Dividends are unlikely, unless it's a value stock... If it happens, it goes to the owner of the stock when it was issued. 2) If short selling is done as a derivative, then it will 'derive its value' from the underlying asset.

[@Usman-ml4ig]

Short sellers have to make good dividends to the party they borrowed stock from.

[@Usman-ml4ig]

@@arnoldachiri4810 The question was specific. Factually, the short seller has to make good any dividends to the one lending the stock.

[@Usman-ml4ig]

With due respect, there's *no promise* of dividends in common equity! So, really, the management never asserts, 'we may pay you a dividend...' as you claimed at the start! The company may of may not pay a dividend, but the management never makes any promise for it!

[@kantancapital6512]

may already indicates a possibility (which implicitly tells us that the company also may choose not to pay dividends) from my understanding.