Paul, I see nothing in your post that upsets me, your theories are reasonable.
I also think you've summed up what is publicly known about the fundamentals in a fair way.
I do disagree with a couple of your points. You've said the skeptics have constantly predicted VLNC would run out of cash, and then claim that has been wrong. From my perspective, they have come very close to running out of cash on several occasions. But they've always managed to raise more right when they are running out (like now). I've never said they won't be able to raise more, but wondered about the terms under which they would raise new cash (as I do now, see prior post).
Also, there is one large institutional holder of the stock, Dimensional Fund Advisors. It is conceivable they are selling.
I agree the selling this year is different, and appears to be a methodical attack by somebody. I also agree the stock is being supported to some extent.
There is a possibility I would put forward that you did not mention. That is the attacker and the supporter are one and the same. Think about it. A methodical decline in the stock price, with large blocks being sold at relatively high prices, and then other large blocks supporting at somewhat lower prices. But the sellers always having a slight advantage over the buyers. A single deep pocket could slowly and methodically drive the price down by shorting some at a somewhat higher price, covering a bit less at a somewhat lower price, and then shorting some more at a somewhat higher price.
If the large seller and buyer were one and the same, it would not take anywhere near the net increase in the short position that you suggest to slowly drive down the price of the stock.
As with your post, this is simply a theory. IMO, it is pretty clear that the stock is in the hands of the big boys. Where they take it, I do not know. I do know I am quite comfortable on the sidelines right now. |
