For everyone concerned of the article on the partnership, you need to realize how much money is at stake. There's about 35 million shares shorted. Two months ago, GERN was trading at $2 for a long time before investors realized median survival has not been reached. Investors threw money at GERN with consideration it can be a drug deemed essential to market by the FDA. This massive gain signaled short traders the stock may adjust down. A tight-lipped partnership in the biotech market is every shorts dream- easy to manipulate investor sentiment and thus price.
During it's shoot up in March, it would have cost shorts over $100 million to cover. Despite your personal feeling for shorts, they are extremely resourceful in spreading doubt using a repeatable process- spread doubt and coordinate a steep sell off to prime a panic sentiment.
An negative article in March from Alpha Exposure & Adam Feuerstein and multiple advertisements of potential lawsuits sent prices tumbling down to a modest 50% gain. A month later, the price still stands at 100% gain from its value two months ago. These gains push shorts against the wall once again.
It's not easy to just accept losses of this magnitude. The short article and morning selloff today can be seen as an unfortunate event for many longs- it was after all, a solid 5% win for the shorts. The remarkable note to be made is the selloff and article had only a 25% effectiveness on share price it had a month ago- signalling an enormous improvement in sentiment towards the value of GERN.
Here's what to expect- Gradual increases in GERN's share price and another short attack against GERN in the next 2 weeks. If unsuccessful, this may trigger a reduction in short stake assuming there are no meteoric gains in share price
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