I admit CC's latest selling is surprising.
You wrote: "You also claimed a few weeks ago when the price started rebounding that the short attack was over and you projected clear sailing ahead. Now once again you are predicting the selling is over."
I didn't claim "clear sailing", those are your words. I predicted that a conversion decision or settlement with CC was likely, to the derision of many on this thread. And I believed the "death spiral" attack was finished, and I still do. We are unlikely to see the conversion price get below the 4.47 price CC converted at last time. I also said we should rebound to above 6, and that we did. But I didn't expect to see CC's massive sales over the last two weeks, because frankly, it wasn't in their interest to sell that way.
I actually thought we would get some short covering, and CC would sell any incremental shares they converted over their short position over a longer period of time. It astonished me a week ago, Wednesday, to find them dumping 30,000 a day again. Of course, the shorts were in no rush to cover, given that tape action from CC. Everyone could see CC selling, and the buyers backed the price down fairly fast. On Friday, we saw signs that CC is finishing up, and we got unmistakable signs that the shorts are beginning to cover.
Its pretty clear now that CC must have a policy requiring them to not hold unhedged long positions. They have to sell, or hedge long positions as fast as they are permitted.
But by now, CC must be very close to disposing of all their converted shares, and the shorts are still mostly short. We didn't get the short interest numbers (for the period up through September 10 trades) on Firday as scheduled by NASDAQ. But we should get those numbers Monday (probably before the open?). I still believe there is over a million naked short shares out there, and this is a lot of buying fuel for when the stock starts climbing again.
Paul |
