Now hold on there, Larry. We knew which MMs were shorting since early June, but if CC was obeying the dictate of the agreement with Valence limiting them to 30k shares/day, it was unlikely they were one of the initial ones pushing down earlier this summer (the MM REDI).
My statement from mid-July, regarding CC not having a 'large' short position was also premised on them obeying the intent of the SEC regulations, that would require them to file changes in beneficial ownership, as I've posted since last winter. (Although if you'd chosen to point to another post, I also stated it was *possible* they had shorted a million shares, but this would be a potential violation.) Clearly, since they now admit to the company that they did short, they drove right through that loophole. Doesn't make it right. But that required us to reevaluate who was doing the shorting earlier (before summer). I posted in this regard in the last month or two as well.
Finally, there is another MM in particular who was very aggressive recently in shorting in the 4s, and the only party who would have the comfort to do that would be someone with their shorts covered, namely CC. Hence my final comment that we have a pretty good idea who CC used here.
BTW, since this MM shorted 60-80k shares one day alone last week, one time with three 10k blocks, then if that was CC, they got caught with their hand in the till (violating the 30k shares/day restriction). Maybe Valence also caught them breaking the restrictions in the S-3 regarding 'no stock manipulation,' and restrictions on illegal coordination of efforts with other 'agents.' The three main MMs we saw walking and shorting the stock down were very coordinated in their efforts. They have great reason to be concerned at this point in time, if the SEC is called to investigate.
No contradictions in what I posted, though, just updating and revising as more complete information became available.
Now, if CC walks away from their current conversion, and does a deal with Valence, what would that imply to you? CC has already opted to lose some of the shares they could have had if they had converted today.
I agree with Paul that they will have to spend even more to drive it to 4.5 and hold it there. (Who do you think has deeper pockets, them or the Valence BoD?) So there's a reason beyond the flimsy premise that they can get it lower and get more shares that way, as to why they didn't convert today.
That's my current best guess, based on the limited but telling information. Now, if some bold short chooses to short aggressively next week, it could get interesting... but not likely profitable for him/her, so I would discount that probability. No more apples on the margin tree unless they gamble Carl would let them take it to $3... which I very seriously doubt he would. When the other shorts jumped on this bandwagon last winter and spring, they no doubt did not factor in the deep pockets on the board of this company, nor their willingness and desire to defend their investment.
Presuming that Valence will be delivering later this fall to contracts at the run rate they quoted us in the last conference call. I've placed my chips on this side of the table. |
