I spoke to Kim Hart yesterday.
1. He expects the company to have a news announcement soon, even prior to the Annual meeting. I guess that means next week.
2. I also found out that I have misinterpreted the meaning of the vote on the stock split. I though that a vote in favour would oblige the company to proceed with the stock split, but that is not so. The company will still have the discretion to proceed or not with the split. However, if they decide to proceed (and they probably will sooner or later), having shareholder's approval ahead of time means they can declare it and execute it right away. It may very well be declared at the annual meeting, but not necessarily so.
3. As far as the quiet week we experienced, I would prefer a quiet week to a topsy-turvy one, anytime, especially when biting the time awaiting for an announcement. The stock could have really drifted off this week due to the weak demand, but the short-sellers were merciful and did not toss it around, buying it back at the lows.
4. As far as the company needing financing, George Chelekis in his November report theorized that the financing for the hotels would come in the form of debt rather than equity; the company has not indicated what type is contemplated; I guess it depends on the type of deal they strike with a major casino operator.
5. The only thing the company can do to "move" the price up is to explain the merits of its projects to people wanting to learn about SGI. Premature news releases about upcoming events can backfire tremendously if the events contemplated do not occur, or, just as badly, are merely delayed. So I agree with the company that it is better to hold off announcing anything until something is done and accomplished, even it is means short-term weakness in the stock.
6. As far as the short position, I don't think it matters much if the short position is 200,000, 300,000 or 400,000. The short sellers, if need to, know how to liquidate it with a minimum amount of pain to themselves. In order to squeeze them out, you would need a great burst of relentless buying for several days in a row, without a pullback; something that I have not seen yet. Unless some institution comes out of the blue and wants to buy 500,000 shares as quickly as possible and at any price (as opposed to buying in 1000-share blocks, the obvious way to do it), the shorts will be able to exit slowly at minimal loss.
Mayer |
