[felipeko]

And what happens in the shareholder meeting?

Would the previous majority shareholder group lose their majority even if they had sold no shares?

Or would the new majority shareholders have no decision making power even though they have more "shares"?

[rocqua]

AFAIK a stock that is available to lend does not have voting power. Hence, if you put a stock up for lending (even if no-one actually lends it) you can no longer vote with it.

This can be used to get more votes by borrowing stocks just to hold and vote.

[felipeko]

Yes, that is my understanding.

But I'm asking in the case of naked short, which is what is being defended as "superior system" in this thread.

[dcolkitt]

IMO, the best system would be to let anyone who's a beneficial owner cast a vote with the rest of the share class. So, if the float's 1 million shares, and 500 thousand are shorted, then there's 2 million shares held long. Let them all vote. Make this system a requirement for listing on a public exchange.

Whether a long is synthetic/borrowed or primary, their interests are aligned. They both want the company to do as well as possible. It also avoids voting rights shenanigans that exist, even with the current borrow-to-short system. At the very least it seems extending voting rights to synthetic longs won't ipso facto make corporate governance worse. I see no obvious downsides. And the academic evidence shows that removing constraints to short sales makes corporate governance significantly better.

[rocqua]

What effects would this have with regards to people buying voting power by lending their own stock to themselves?