A small, but powerful, "short-on-value" contingent has been identified as the dominate supply-side force in the market for INPR.
The "short-on-value" strategy involves picking out of favor stocks, and then crushing any hopes of a bounce by providing as much buy-side liquidity as necessary, and then using the underlying downtrend to wait out more conservative investors and bottomfishers by forcing prices to exceed each partys maximum threshold for pain.
A common condition of stocks that are being dominated by "short-on-value" players is frequent spiking followed by a slow fade so to exhaust the steam behind any real buying before it has the chance to precipitate a change in overall trend. Another being the crossing of very large blocks with very little price movement. Block buyers find they can get as much stock as they want, which leads them to believe in an over-supply of shares for sale. The shares actually belong to shorts increasing their position to protect the trend, no matter how absurdly low the price gets in the end.
The eventual hope is to eliminate the companys most efficient means of financing and then force them into insolvency, covering the shares when they become next to worthless.
Investors tend to correlate prices with intrinsic value and price trends with intrinsic improvement or weakening of the companys position. Its a false correlation, yet however a very strong one, which makes "short-on-value" investing so lucrative.
There is however a few mechanisms that can throw a major monkey wrench in a shorter's plans. The primary being a buyout. Buyouts can lead to incredibly immense losses for shorts since they are no longer afforded unlimited time to nurture their positions. They must cover shares before the buyout concludes and do so on the open market.
The other major mechanism is a company buyback. The company can intervene and liquidate short-seller blocks, and thereby affirm a floor price in the market for their stock, in turn dissociate price movements from knee-jerk reactions and capitulations by disenchanted investors. It is extremely dangerous to short into a legitimate buyback, esp when the company has an incredible amount of cash to liquidate available shares such as INPR does.
After evaluating these circumstances, i'm an certain the potential upside on INPR is completely obscene-- 500% to 900%-- provided that the situation is correctly utilized by market participants and management.
SNDK is one recent example of a "short-on-value" tribe that was decimated, and as a result producing obscene gains for longs. The SNDK squeeze produced 2000% gains in about a years time. Theres no reason why the same cant happen to INPR, esp given the strong industry they are in. Investors love this stuff.
Just give them a good enough reason to get onboard the INPR train, and they will do just that |
