> How does one value a share that, if sold, would immediately diminish in value?
v2 = a * v1
> How is a lender to grant credit based on such collateral?
v2 = a^2 * v1
The first where a share is bought to be held for voting rights or long term investment and the second where a share is bought to be sold. Where "a" is the value retained.
It would be priced in like any other commission, fee or tax.
I don't think that it would sow chaos -- financial institutions and investors are pretty good at estimating value.
> Options would be massively difficult, leading to a secondary market for shell contracts in order that shares need not officially change hands.
Like derivatives? How about we just regulate those across the board.