(Warning: Long post). So it is retail. Rkf, thanks for your helping me here, I sincerely appreciate. I know you KNOW what can and can't be done via disclosure by managed funds, and I so appreciate you weighing in. That helps me personally as I have tried now for 2 years to wrap my head around the decision making of the group of shorts. There is so much I simply don't 'get' in what their logic might have been and especially where a short's head is at now.
Here are a few musings I have thought about in the time the shorts entered in to Lightwave Logic. To start with, some will remember, I started believing what we were seeing were large funds (all the Blackrock's and Vanguards of the investing world) trading short with algorithms designed to induce panic selling by longs so they could all the while load up on shares themselves. Where my head was at here was a belief that those funds could balance out (hedge) their long position and try to induce panic selling by longs so they could buy at a targeted price until news broke (where they would cover short shares and hold their long shares with a squeeze) that could benefit them and crush any retail shorts that are only playing it one sided.
Now, knowing by regulation that's not possible it only leaves open two possibilities in my mind.
Option one: The retail shorts are using the same strategy themselves and are really long, trying to acquire what they can while playing it both ways. I suppose this is still possible, though I don't think it likely. We haven't seen any 5% ownership filings and I can't believe there is a consortium of individual investors that are this organized in really trying to buy shares. I believe the retail shorts are simply short, ala Ockham's Razor, "the simplest explanation is usually the best one."
Option two: As someone pointed out a week ago, the shorting could be done by competing corporations trying to limit/hurt our company. Yet again, logic falls apart here as they would have to disclose holdings if they as an entity were short the kind of shares we have witnessed here.
So, logic simply leads (me) to see this group as retail shorts... That in itself leads me to wonder about all kinds of questions. But let's start with this:
It made sense (in hindsight) for retail shorts to enter in when the stock shot up to $20 a share... and then $15 and even $10 dollars a share...back when material was being tested and their were no reliability data sheets (like have been released since), etc.
The initial move was so dynamic at the time and early. I didn't want to admit it was premature as a very long term shareholder, but I accept my bias and while I held, looking back, it made all the sense in the world for shorts to enter in at that time. Now what I don't understand is the long term play here for shorts. (What were they thinking when they could have covered for a tidy profit a year ago for example?) Why have they only continued to expand their risk position while they could see managed funds, some of the biggest and most successful and sophisticated (Blackrock/Vanguard) have had an insatiable appetite for accumulating and increasing ownership position each quarter since the NASDAQ uplist.
How could the shorts put themselves in the place where they would be unable to cover should there be more partnership news, a first buyout offer, a rumor or anything else that could cause a squeeze? What has been inconceivable (to me) is that they didn't work to exit their position when they could have even a year to a year and a half ago.
Now... I know there are many who simply short pre-revenue companies as a 'basket' and it especially made sense during the time of sharp rising interest rates that we saw to fight inflation 2 years ago. We all know how rising interest rates can be painfully brutal for small companies, restricting access to capital, etc. Yet, how did this group of retail shorts go this deep, to the tune of 22 million shares short... and to hold through the leveling/cooling off of rates? Why didn't they try to take an exit down at $4, $5, even when it was in the $3's even if starting to cover would have caused a return to the present, artificially depressed price? There really is no reason unless you believe the company simply will not make it as a going entity. Again, the basket theory holds here. So many pre-revenue companies do go belly up, that I suppose I can see the logic in seeing this that way... again, 2 years ago.
Yet any amount of research here quickly will lead a retail short to see that the company has several very strong factors in it's favor that should be strongly considered when making such a large investment where an investor can literally be trapped as shorts can. Impeccable, industry leading directors and Dr. Michael Lebby who is really 'the' visionary leader in the photonics field. That should be a huge red flag to a short. The directors and our CEO are truly world class and no matter what a short might insinuate, they will fail to find anything of substance against the board of directors or our CEO.
Then add into this, the truly explosive nature of the company's product offering, the critical mass facing data centers for needed order of magnitude transformation and now the insatiable hunger AI is placing on the challenge of moving data faster, cheaper, greener, etc. Add to that, the ramp up they have seen of company hirings, especially in the area of business development. A company doesn't make these hires if they aren't confident/trending toward development, contracts and company maturity. Any amount of research quickly reveals how 3-5 years ago, Dr. Lebby was directly involved and LEADING in laying out 'the' roadmap for the industry here toward needed change. Now we are watching it come together in real time. March and April will be revelatory. The words Dr. Lebby has used, seeing the technology as 'ubiquitous' is something you don't say at risk of SEC reprisal unless you are leading a company successfully through development.
So now my questions for which I really don't have an answer: Have the shorts been as greedy in hoping for a lower low that I and other longs were when longs held (or bought more) when the share price hit $20 dollars after NASDAQ uplist? Is what we are watching really that simple? Why would shorts choose to hold and pay interest for such a long term play here? How organized is short collective? With price appreciation, how fast will we see breaks in the armor of the short collective? For example, what happens when a few begin to blink and cover? Do the shorts really believe it's going to zero at this point? (That's perhaps the only thing that could make me hold a position IF I were short, but how incredibly risky in light of all the mounting evidence of the potential for the company to be a huge winner? Why, when it became obvious here, that the company had accessed and managed finances brilliantly, (and there is no change of running out of funds for a rolling 18 month window, why did they not adjust by de-risking their own potentially unlimited liability? Are we really watching a 'head in the sand' approach by shorts as has been speculated by so many here?
Ok... very long post, but things I have wondered about in the last 2 years..
Best to the longs, these are truly exciting days....
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