The ending

I thouroughly enjoy but I can't seem to figure out the Deus Ex Machina.


Godfrey tells Bullock that he sold short when Bullock stock was being dumped. Now when you sell short, you have a negative position but cash on account. When you close the position, you keep the money and end up with no stock. But then he tells Bullock, "Here's you stock", but you wouldn't have stock when you sell short.

Now it could be that after closing out the position, he bought the stock that he closed out for a song, but then wouldn't he be handing Bullock stock certificates that are basically worthless?

It could be that he had purchased all of the outstanding stock so that now Bullock is the sole stockholder and the company is now privately held and he no longer has to worry about the "stockholders' money" that he had used, but a detail like that is too important to be over looked.




Also the lines about the $150/month and the trinkets, don't make a lot of sense, because when stock is sold short, money is received, not invested.


For example, Godfrey short sells, 1000 shares at $10 a share, thus he would receive $10,000 on account minus the brokerage fees, but he has the money on account. I am not very familar with margins guidelines for short positions I have been told what is required is half the stock price, which he would have received at the time of the sales. That may be that way now, but back then I do not know if there is any difference, I couldn't imagine that he would need more cash on account than the price of the stock and MAYBE a cushion like maybe 10%, so really all that he would need would be the money for the brokerage fees for the first transaction, because after that he would have more margin available to pay the fees for the next transaction. From that it would seem that $150/ month would be sufficient to do what he did, or a small personal loan from his old friend would have been sufficient and the "trinket" would not have been necessary.



The other thing is that when all is said and done, the thing to do is to buy the stock back and be left with just the cash. He told Bullock, here's your stock, but didn't say, here's your stock, plus $25,000 that I earned with the deal and I used some myself, but he didn't. Bullock may have his (worthless) stock, but he still needs money.


I just have never been able to figure out how it really helped out the Bullock?