Hi Raymond.
Your analysis is logical but I have a question about whether or not the short position confuses things enough to allow for a "special situation."
What does it mean to the long-term trendline that 33% of the float is short and its holders have orchestrated/benefitted from a sharp attack in the media during the past month? If I follow you, your argument would be that the broken trendline is an irrefutable argument, the "real story" that deserves more consideration than anything the company might say, or anything the analysts might predict insofar as future sales go, and that the short interest is irrelevant to or just a by-product of the "real story."
I think most here would like to think that the short interest has been responsible in some way for the big decline. What makes your argument distressing to long-term holders is that it seems to say it is not.
But mostly I wonder about this: we have this solid, four-year trendline that has been decisively broken. And yet, even today, the stock is up about 30% from where it was two years ago just before the loss of the WCW license, and that price (32 two splits ago) was in an overbought phase. It seems to me that when such an important trendline is broken, the actual stock price out to be lower. Why is it not? What do you say about starting a new trendline beginning at the bottom that was hit shortly after the loss of the WCW license. If you draw that line, it's a little less steep than the four-year line, and it would not yet be broken. I'm just wondering if the loss of the WCW license and the advent of the big short position doesn't justify a "new start," if you will, for the company. Comment? |
