Zeev, <<So, Gary why the excess of 10 MM shares? Someone must have printed these shares and sold them. That is your culprit.>> A number of us had speculated that the volume was some sort of conversion or floorless, that's what our experience shouted. However, the company insists that there isn't any such thing, even put out a PR saying so. So where can the shares come from? 504s are now restricted, even if there are any. So where are the shares coming from? Could this really be a massive shorting campaign? Let's walk it through.
1. If it's not conventional shorting, there is something very illegal by the company going on here.
2. If it is shorting, there could be a significant short covering rally if this company shows some success and a path to profit.
3. Maybe the shorting is justified, the process, or reserves don't support the capitalization, your suggestion. However, the shorting volume is significantly over subscribed, there aren't enough shares to borrow, the volume is just bookkeeping. In that event, there is still a good chance for a short covering rally as other "money" works the potential shortage (maybe the reasons for all the crosses, the set up.)
I have never see anything like this, IMO if we can understand it we may be able to play the trade. Do you have any other ideas? |
