John, I am happy I could provide a bunch of chuckles, at least one positive comes out of all of this.
As for the floorless thread, only recently it has turned as a hunting grounds for short candidates, mostly because in the past, most of the floorless were trading under $5/share and thus not shortable by "mere humans".
I have not hid from this thread that I turned negative on VLNC as soon as the stock was unable to react positively to the CC, as a matter of fact I sold the very next day. I mentioned it on the floorless since last months (or was it six weeks ago?), a number of "above $5" floorless were presented by various posters and my opinion was solicited as to their potential, the four stocks were PPRT, UOLP, BDE and AND, all with recent floorless debentures, all of which had the hallmarks of "accidents waiting to happen", and thus to those inclined to short (which I am not, as I have stated numerous time), I suggested these could indeed be easy short (we call these there shooting fish in a barrel, as you have noted). Most of these have achieved a target of 50% of their original price at the time of those postings, and Spark asked for a "refill", I had none but VLNC, a floorless that has just broken down, and thus theoretically has a target (IMHO) of about the low $3'. I believe that if you read that post, I also warned of the mercurial character of VLNC and if those PO's somehow materialize, they'd better have close stops to protect themselves (something that professional shorts, I presume, always do).
The problem with this thread is excessive "loyalty" to this stock, look at what it leads to, "averaging down" into the weakest stock into ones portofolio. You need not be a genius in calculus to see that averaging down into your weakest stocks (and you must admit that right now VLNC should be categorized as "weakest stock") concentrates assets into the weakest stock until the folio is composed only the least performing stocks.
I am not apologetic about my trading in VLNC, when the time will come to be a long term investor, the stock will give all of us ample warnings, and even if I jump in when the stock breaches back $6.125 (the current major resistance), or in few weeks when that resistance is lowered to $5.375, there will still be ample profits to be made. In the meanwhile, the shorts can have their day in the sun (they have for quite sometime seeing how the short position has increased month after month).
As for my comment about the shorts having to eventually cover (unless the only shorts are the floorless bandits, they do not cover, they cover with converts), go to RMBS and see how everyone is licking their chops at the vision of 7 MM shares or so that will need to be covered.
Good luck, and indeed, where are these PO's.
Zeev |
