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Strategies & Market Trends : The Aristocrats (tm) -- Ignore unavailable to you. Want to Upgrade?

To: sense who wrote (2252)	3/25/2021 6:26:02 AM
From: sense	Read Replies (1) \| Respond to of 5603

HPR shares doubled today... after I posted on the Colorado oil company last week Thursday. The sudden move caused the company to issue a statement saying it was unaware of any material change that could account for the market activity... noting the planned merger remains unchanged in its outline or schedule... My consideration of it noted what appear to be obvious errors in others analysis... the expectation that one share of HPR might be converted into 1/3 of a share of the new company seems a likely driver of the market action today. . I don't think that's what was coming. I think the plan of arrangement they have sees the debt convert to a 94% equity position before the deal is consummated... meaning shares of HPR bought now become only 2% of the new company, not 30%... The other issues ? The short position would have been around 270,000 shares... dwarfed by the volume in the trade today... a block of 1.16 million shares traded in a single candle today... representing about 25% of the outstanding... but more than half of the float. Could be someone is expecting to drive a short squeeze. I doubt that will happen... if the HPR shares were over-valued at $6 the merger approaching would force holders to take a big haircut... and a big risk... so short sales were probably locking in the current price for owners who didn't want the haircut... but also didn't want to surrender their shares... yet. If that's right, the deal being done will wipe out the shorts... to the short advantage... as they already have the $... and simply cover by handing over shares to close the deal. A lot better to have gone short today, still, but about zero potential to drive a squeeze ? An active trade in BCEI the last week... up 9% today... suggests short sales of HPR might have funded some purchases of BCEI shares... as a better route to a larger ownership position in the new company than taking the haircut in the deal. Did someone make a $6 million dollar mistake ? Or, is there something else going on ? I think shareholders have already approved the deal... so not clear how buying shares now might relate to any internal maneuvering intended to alter the planned flow in events. Well worth watching it to see what happens next... They have still not announced a timeline for completing the deal... which seems a bit odd... ?