a "SHORT SQUEEZE" is definately good for DCTC shareholders right now
before presenting my point of view, let's take a look what happens
with CFON ,a heavily shorted stock in MAY,1998.
CFON was traded in $3 level in APRIL, now see the data:
date............high.......low.......close
5/12/98.........2 7/8......2 5/8......2 13/16
5/13/98.........9 3/4......3 3/8......9 3/4
5/14/98.........15 1/4.....7 1/2......10 3/8
5/15/98.........12 3/8......8 3/4.....9 3/8
a "SHORT SQUEEZE" happened on 5/13/98 on good news release.
1. Q: TO WHOM a "SHORT SQUEEZE" is harmful?
A: "SHORT SQUEEZE" , by definition,is SHORTS forced to cover.
when a SHORTS is forced to cover his shorts position in the open market at whatever market prices, He is certainly harmed and result in HUGE LOSS.
2. Q: TO WHOM a "SHORT SQUEEZE" is benefical?
A:when a "short squeeze" pushes the stock price much higher, current
shareholderes will all have an exit point much higher than their cost. THEY will have HUGE PROFIT. since most long term shareholderes
have faith in the company, they will re-enter the stock when stock price stablize a little bit, which will limit the stock's down fall
after "SHORT SQUEEZE".
3.Q: does only a few shareholders could benefit from"SHORT SQUEEZE"?
A: NO.
ALL shareholders will benefit from it. taking CFON as an example,
when"SHORT SQUEEZE" happened on 5/13/1998, some shareholderes may
exit that day between $6 to $9 3/4(a 110% to 250% profit compared with previous day) .some may don't know on 5/13/1998, so they could
exit next day on 5/14/1998 between $7 1/2 to $15 1/4(a 155% to 430% profit compared with 5/12/1998)., even until 5/21/1998, the stock
still traded between $6 1/2 to $7 11/16(a 115% to 160% profit compared with 5/12/1998)
conclusion: ALL shareholder will have huge profit on SHORT SQUEEZE except SHORTS!
4.Q: is a "SHORT SQUEEZE" good for THE company' stock in long run
A:YES!
ONE big REASON for DCTC not to reflet its fair market value(at least$6 now) IS massive SHORT POSITION.
if SHORTS are successful in ITS SHORT PRACTICE, it will most likely they will stay short in this specific stock.
then IF A SHORT SQUEEZE make them in HUGE LOSS and DESTOY its financial ability, they will most likely weaker than ever.
A person who was taught will most likely find another stock to play.
WHEN we talk SHORT SQUEEZE, we are not talking hyper stock, WE
ARE TALKING FUNDAMENTLY STRONG COMPANY DCI and DEPRESSED STOCK DCTC!!
CALL YOUR CERTIFICATE, WE are in the RIGHT stock!
STRONGER THAN EVER. GO DCTC! |
