There are currently 19.3 Million shorts and at this price I don’t think the shorts will be shorting into this very much because the risk/timing is just too great. Are they going to keep providing discounted shares to the tax players? This could pop to 6 bucks in no time and that would mean that those who shorted (borrowed and sold shares at 4 Bucks) would lose 100% percent of their money. Understand that shorts need to put up 50% so if they borrow 100k shares at $4.00 and sell them they must put up $200k in collateral first. When they cover, if they buy back those 100k shares at 6 Bucks they would lose the entire $200k in collateral or they need to put up more money before the broker buys the shares back at market. As it stands today the longs that played the end of year tax thing will currently be buying back twice as many shares as they sold. Let me explain, so 30 days ago they sold at $8 say 100k shares or $800k, if they buy them back at $4.00 they now own 200k shares. There is a risk though that news will come out so I do not think that they will be waiting to see if the price comes down further because they will own twice as many shares of the company than 30 days ago. IMO I think the demand on the buy side will rise so more than likely tax players will be buying on day 31 to prevent the wash sale penalty while increasing their ownership.
That being said, I do think that when it hits $6 the shorts will try and hold the line by shorting into it. At some point they still must cover though. When this short thing ends it will be fun to watch, this is a sunrise business not a sunset. How the shorts think that they can convince the Data Centers with the Power Plants with Smoke pouring out of the stacks will not adopt something that is 3 times the speed using 1/10 the power while being mass produced in a foundry is somehow not going to happen is beyond me.
But games will be played. The institutions still need to hit that 50% number. We will see those numbers coming in soon, for now I think only the paid subscription guys can see that number. Let’s see if that number went up or down. Oh and if the institutions were able to accumulate an extra 150k shares during the morning on any given day they will think nothing of selling 100k to walk this price back down for the following day. For them it is all about buying as many shares as possible while keeping the price inline for the next day and they have the money to do it.
Lebby does need to step up and close a deal though.
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