While the SEC's no short list was meant to protect financial stocks from excessive short selling, the current ban covers stocks comprising nearly 20% of the S&P 500's market capitalization, even though the Financial sector only makes up 15% of the index. As shown below, there are a handful of S&P 500 companies in the Financial sector (mostly REITs) that are not covered by the short sale rule. But there are also a number of non-Financial sector stocks that managed to lobby themselves onto the no short list, most notably GE and IBM. Why IBM, which is just slightly more than 10% off its 52-week high, felt the need to get on the list is up for debate. Our guess is they probably figured that if certain stocks can get special treatment, in the interest of their shareholders, why not them?
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