John, I'll try to give you a devil's advocate point of view for shorting the stock.
Two points in particular: There might be something to the product idea, and there's no evidence that the CEO in particular is a shady person. I'll elaborate on these ideas.
I assume there is something more than hot air to their product idea. Probably you can write data they way they want to. I don't know whether the speed and reliability, or the ease of manufacture will make the idea suitable, but I don't doubt that in the lab you can write little marks on the media and then read those marks, the way that they claim they can do.
OTOH, I think it is unlikely that this particular company, with its present structure and people, has any prospect of ever making the product a successful commercial product. That means there is little prospect it will ever justify its present market cap of around a third of a billion dollars. A high market cap is a short's best friend in a case like this.
Shorts have focused on what seem to be some shady Vancouver elements involved in making this a public company. This is plenty good reason for longs to stay away from the stock, as it is a huge risk factor for the stock. Now shorts, OTOH, need criteria like this to suggest it is worth shorting, but this criterion is by itself not enough. You really need more things wrong with the company or the valuation than just a Vancouver connection, to justify shorting it.
One factor to be aware of is that CEO Levich is not a Vancouver stock huckster, but a real scientist with a distinguished career. What shorts have to decide is whether he is now affiliated with penny-stock low lifes or making a collossal career blunder on the one hand, or whether he might actually be onto something. His prior career doesn't involve doing anything practical -- he's a theoretical physicist who studied interesting but useless things like differential equations for chaos, for example. While he was a leader in this area of academic research, it is a background that provides no useful experience for leading an engineering and technology company.
Happy investing. |
