John, from "cyber discussions" I had with Roger about two years ago, I gathered that he is typically 90% or so long core positions, which he rarely trade in and out of, and short in what he considers overvalued, or well ahead of the curve stocks. His shorting of VLNC, which I believe is quite premature, is simply an indication that a billion dollar plus valuation for a company that has yet to achieve a first "shipping" quarter, a book value of any kind, or god forbid, a positive cash flow quarter, might be a tad "rich". This tactic did not work with some high flying internet stock two years ago, and may not work with VLNC, but for those people that like to hedge a long folio with few selected shorts, the fundamental financial tools used would designate the current price and balance sheet of VLNC as "ripe" for shorting. Thus, do not be surprised to see the short interest slowly climbing in the coming months, as more and more shorting of the stock occurs based on these type of principles. One tenet held by shorters is the old Murphy's law, if anything can go wrong it will, and VLNC's price here has no margin for such an error.
Good luck
Zeev |
