It is very difficult to short penny stocks on the OTC. Most brokers don’t allow shorting them and the ones that do charge more in fees than the profit one would realize. The margins can be huge as well.
I know we all want to blame boogeymen every time things don’t work out the way we want. But there is a simple reason why today’s news didn’t send KBLB into the stratosphere: it was fairly modest news that people expected. It came a little earlier than I expected (a good thing), but the quantity of silk reported was smaller than I expected. The share price did break the 52-week high and that is certainly a positive development.
The news also had a mitigating factor. We all understand that this production cycle will yield around 33 kilos of silk. Thompson indicated that this was the largest batch of silk in the company’s history. Everyone who thought KBLB had squirreled away metric tons of silk found out they were wrong.
There are no tragedies here, no reason to cry in our hankies. We just have to be patient for a little while longer. As KBLB edges toward metric-ton levels of production, investors will want to know that there is a market for a cotton/DS blend at the price Thompson wants to sell for. Who wants to buy and how much are important unknowns. Hopefully KBLB, Kings, and Spydasilk all know what they are doing and we will get news about products in the next several months as well.
Instead of blaming short sellers and the market makers, assume that people pretty much expected today’s news and are looking for something more dramatic to ignite a feeding frenzy.
KBLB: More patience is required.
