Even though I'm not Fundamentals, I'll take the liberty of responding.
Our view (the view of LOAX bears) is that there are significant valuation questions and potentially significant honesty questions related to LOAX. Most of us feel quite confident in LOAX as a long-term short (I'd be happy to detail the reasons in another post if you'd like). The near term outlook, however, may be a very different animal.
Assuming that management has not already shorted the stock off-shore (a significant assumption), then they have a strong motivation to cash out part of their position come October. When they do, they'd like the stock as high as possible. Thus, there's a decent bet that there'll be another appealing press release prior to when the insiders want to sell (but potentially after the lockup ends). This press release should send the price higher.
I don't share the view of other shorts that the stock will collapse after the lockup ends. However, I do believe that a couple of things will occur: the upward volatility will be much smaller since there will be an increasing float and less of a short squeeze effect. And the downward volatility will increase as each normal downward sway in price is accentuated by nervous insiders who want to make sure that they get at least some of their net worth into cash.
Thus, your best strategy might be to sell some of your shares now to lock in your profit. Then with the remainder it's probably worth waiting for another press release. When that comes, you should be able to sell higher, perhaps even in the high 20's. Conversely, if the stock starts to deteriorate too much from here, you can always sell the remainder and still have a profit from the whole position.
In summary, I have a pretty strong conviction about where the price will be 2 years from now. I haven't a clue where the price will be 2 months from now. |
