Yes, I am used to people considering my perspective questionable. No big deal.
Here is why I went short:
1. Heavy insider selling, if you look at the action for the year.
2. Major reversal pattern on the D1 chart (for me).
3. Incredible amounts of selling. No one can argue against the fact that someone is selling millions of shares.
4. Negative cashflow. They had -$4.3M in cash flow last quarter.
5. Debt is about 2-3 times their quarterly revenue.
6. There is an anomaly here, in terms of the sector. All the other stocks are down. This one is up. That either means it will revert downward, or it truly is a diamond in the rough.
So, these are the reasons I went short. When I go short, I have many, many reasons. I do not just short for 1 reason.
Now, to be fair, here is why I exited at a small loss:
1. Price did not break the 1.60 area, as I expected. I was expecting price to retest 1.40, and it still might. We will see what happens over the next month or two.
2. I am not willing to hold this insanely volatile stock through the holidays, while I am on vacation. Checking the charts for big news every day, is not my idea of vacation, and I would have to do that on this chart, obviously.
3. This company has a lot of good news that it is churning out. In my experience, the better short plays have ZERO news (or really poor news). There is definitely some quality here. You cannot deny that, IMO.
4. They seem to be striking up a bunch of deals.
5. They seem to have generated a bunch of interest recently, which may lead to more deals.
6. The 1.60 area held 3 times, and the company is putting out news every time the 1.60 area is hit. They obviously are intelligent, and I applaud that.
The chart says lower, in my opinion. The recent news/fundamentals makes my interpretation of the chart, iffier. Therefore, I cannot justify holding a short on this, any longer, especially going into the holidays.
We still need someone to answer these questions:
1. Who is selling all the stock?
2. Why are they selling all the stock?
For #2, the only thing I can come up with is that the tests on CoCo are not as good as everyone had hoped.
Now, before everyone starts throwing stones, realize that GROUP THINK is a bad thing. It is good for someone to come in here and challenge you to think about this situation. Sure, you can probably, from your perspective, shoot down all of my interpretations. However, just the fact that this might force someone to think about this situation a little more closely is good.
FWIW, GLTA
I hope it goes to $25. I would rather be wrong here and learn something and see everyone make a big profit than be right and realize that I should have held. I know that sounds weird, but I have a hunch here that I should have held because most of my trades I exit too early.
