Why the increase in short interest?
Here's an opinion, based on market dynamics, for what its worth:
The first question is-What is the reason for the 40% increase in short interest while the stock goes up over 20%?
Several assumptions need to be made:
A- The prior shorts are largely out of the money.
This is probably accurate, because less than 2,000,000 shares have traded hands above current levels. Many of the shorts are in from pre split, at split adjusted prices of $10-12.
B- Their only chance to get in the money is to support their position, which can only be accomplished by selling more stock. Unfortunately for them, they could only hold the stock to a 20+% gain while providing support.
If you accept the above, the next question is: Why do they believe the stock will come back to them before they get buried?
I can only speculate, as follows-
A- They believe there will be no announcement prior to the beginning of the conference May 1.
B- They also believe, given the above, that panic will set in amongst the longs, and the price will collapse, giving them a chance to get out.
Part A may well be true. The company is not committed to finalizing the agreement prior to the meeting. Part B will turn out to be true only if enough longs ignore all the DD done by members of this thread. The Company will be at the conference, showing their product and taking orders, following a prescription laid out by the future partner(s). The partner(s) cannot participate until the deal is signed, but they can certainly provide guidance so the Company is well positioned when the details are all worked out.
The key is, if Part A above comes to pass, that we longs do not let further selling pressure panic us into selling our positions. The Deal will happen, it will be large, and it will be soon.
Anyone who doubts this, consider:
The owners(stockholders)of this Company have spent countless hours researching the prospects, and TALKING TO THE COMPANY. The shorts, on the other hand, have not done any credible research, and they refuse to call the Company. Probably because they know deep down that they're on the wrong side of this trade, and don't want to accept the fact. A classic case of human psychology applied to market dynamics.
The overwhelming evidence is that CCSI has an FDA approved product that has dramatic demand, and is well positioned to protect their technology. They have repeatedly said, as recently as two days ago, that the Deal will be 50-50 with the partner, and there is nothing to date in the negotiations to suggest otherwise. The shorts are grasping at straws, and if their pockets are deep enough, they will continue to support their positions until we make new highs. But they won't sleep well, and they WILL get buried.
All the above is just the simple opinion of one person. Take it for what its worth. |
