Check out Anthony's thread here on SI, from which most of these shorts seem to be originating. He basically does the same thing that he accuses long hypers of doing. For example, he states that the same crooks and scam artists are/were in control of the company two years ago when it was EXTL. In fact, there is new management and Vizas has done just about everything he promised and then some.
Sure there is a big rise which will attract shorts. But if you consider this over the long run, EGLO was way undervalued considering the market. Today I look at it as catching up with a long way to go.
Even with total dilution, if you put a B2B and internut valuation on this as some of the recommendations have stated, this stock could be in the 40's or higher. I'm not saying it should go there today or this week or next.
The only fact the shorties have come up with is that there has been financing which is convertible and which will cause dilution. Look at the volume over the past week. I suggest that this dilution, if it happens, will be assimilated very easily.
The stock is now on the radar screens of institutions and big players, who stay away from under $5 stocks.
Holding above 10 today is extremely bullish and the short squeeze that will inevitably happen may really propel this upward.
As an aside, I suggest that all longs put in sells (good til cancelled) at a very high price (I suggest 45). This may prevent your broker from lending out your stock for shorties. (Check with your broker, some require the stock to be in a cash account, others will do it in a margin account, others will only guarantee if you take possession of the stock.) |
