[gokhan]

>The share can then, afterwards, be loaned out and sold again.

I've seen the same argument more than once this weekend but this flood [1] (also linked from the TFA) says otherwise:

In order to meet legal requirements, the broker has to find un-lent shares (so the same shares aren’t lent twice). The PB will “tag” those shares, indicate to the client the prevailing cost to borrow, and provide the client a “locate ID” that guarantees that client those shares.

[1] https://twitter.com/compound248/status/1355276755980980225

[grandmczeb]

I think you’re misinterpreting the linked statement - they’re saying A can’t lend the same share to both B and C at the same time. If B borrows the share and then sells to C, C has a share with a clean title and can then lend to D. Otherwise there would be two different prices for lent and unlent shares, since you can make interest off one but not the other.

I’m not 100% sure this is correct though, someone please let me know if I’m wrong.

[klodolph]

That’s interesting… people in that thread have the same questions, but they are not answered. Perhaps we will eventually find out after the SEC investigation… or perhaps someone will just stop by and explain it.