[jcranmer]

Short answer: the people doing this think it's going to fuck short sellers over.

The longer answer involves trying to make a coherent story by people who are financially illiterate trying to read moderately advanced modern finance textbooks to explain why they were unsuccessful in fleecing Big Bad Finance™ by somehow finding a way to trigger financial apocalypse. The more you try to understand it, the less sense it is going to make.

[deified]

I'd rather say they are trying to prove some things to the general public.

People new to the stock market assume that when they buy shares through their broker, they own the share. They also often buy shares in hopes that the stock price will go up.

However, more often than not, a broker will hand out an IOU when you "buy" a share, and then proceed to rent out the share to short sellers. You buy a share in hopes that the price will go up, but that share is then used for the opposite.

Buying a share through the company's registered custodian prevents this.

They also want to show the general public that even when 100% of a company's shares are bought, owned and locked down - short sellers are still able to generate phantom shares to move the stock price down.

[akerl_]

> However, more often than not, a broker will hand out an IOU when you "buy" a share, and then proceed to rent out the share to short sellers

There are specific stock lending programs, but can you back up the claim that brokers are silently lending shares from the portfolio of people who did not opt in to such a program?

[tptacek]

The actual purpose of DRS shares is to make it psychologically more difficult for low-information retail traders to sell shares.