Forever the eternal salesman, Gerry Harvey, the Chairman of Harvey Norman, has had to eat humble pie after he tried to jack up the value of his sinking share value in the big retailer, claiming shareholders should “sell your house, sell your boat, sell your car [and] put the lot into Harvey Norman”.

The only problem is that the shares have tanked close to 10 per cent since the Harvey Norman Chairman spruiked an investment in Harvey Norman, with many tipping that the shares could fall further as the big retailer looks to offload surplus stock.
Now short sellers are nibbling at Gerry Harvey’s ankles and that’s one issue that is a major problem for him.

According to the Financial Review, in the week to March 6, Harvey Norman was the ASX200 stock with the highest amount of new short interest, fully 8.9 per cent of its free float (or 4.1 per cent of the total) in the hands of short sellers, which is an increase of 17.9 per cent on the week before the result.

Up to last Friday, a further 3 million shares have been short-sold, with this believed to have increased this week. The ASX system is slow updating short sell data.

In the past fortnight, Harvey himself has been a buyer in the same market, putting down $14 million to gobble up another 3.7 million shares. If he profits from these trades, the short sellers lose, and vice versa.

Of course, Harvey doesn’t think “criminal” shorting should be legal at all.

The AFR said that when he listed the business back in 1999, he banned institutions and issued stock only to retail shareholders and other small-time supporters.

In the years since, enough of these small-time investors have dumped their stock to leave plenty in the hands of institutions and major fund managers only too happy to clip the ticket by lending it out to shorters whenever there’s demand.

He is so frustrated at short sellers, some insiders are claiming there are teeth marks on Gerry’s desk.(joke).

“This is one issue that drives him insane,” claims a former senior executive.