Yes, the short position is up.
And I suspect the shorts have increased their position substantially since the effective date of the August report. The key question is "When this game of musical chairs will stop?"
According to the spreadsheet I keep, the closing bids for the last ten days are (the first several days in this list, I may have the bid price off by a 1/16, but they aren't in the six lowest bid days anyway):
12-Aug 5.3750
13-Aug 5.4375
16-Aug 5.4375
17-Aug 5.3125
18-Aug 4.5313
19-Aug 5.0625
20-Aug 5.1563
23-Aug 4.8750
24-Aug 4.7500
25-Aug 4.5625
The lowest six bids average to give us a CC conversion price of 4.82 per share. At this price CC gets an additional 325,000 shares worth about $1.6 million.
The lowest price in the last ten days was last Wednesday August 18 (this is contrary to what the most active poster on the thread claimed day before yesterday- he either lied intentially, or really doesn't know what is going on). After next Tuesday, this price will drop out of the ten day period, and CC will no longer be able to include in the low six prices. Lets look at a likely case:
If the stock stays at 4 11/16 to 4 3/4 range (current bid/ask), then CC's conversion price on Tuesday will be 4.56 a share. The conversion price would increase to 4.60 a share on Wednesday when Aug18 drops out, and CC would forego an additional 16,000 shares worth about $75,000.
Of course if the stock price continues to go down below 4.50, then this game continues. But there is a reasonable chance that if the price holds, and then even upticks mid-week next week, then the game is in the end stage, and the shorts will begin to scramble for shares.
For longer term investors, next Monday and Tuesday may represent an attractive entry point, if the price holds steady until then. I disagree with Zeev that if the price rebounds to the mid-5s, that it will be attractive place to short. At that point, I believe the game will be over. Either CC will have converted, or they will have elected to pass on the current buying period. If the stock is at 5 1/2 on its way up, then it would take a pretty strong round of shorting to reverse it. And CC will have lost money shorting on the current round of shorting since the low price days will falling out the back end of the ten day period. They can't short with impunity forever with the stock price staying level or going up.
Paul |
