At one time, I would have said "Yes"...
And I'm sure it's an option that Hemi looked into. There are also several other methods that a company can employ that will most likely cause the MMs to have to cover....
But we're coming down to the wire now.
Most of the solutions that COULD have been tried by Hemi would have probably turned out to be temporary at best. Unless they did something that put them beyond the scope of the MMs.
But think about it from 1)Hemi's perspective and 2)Oil & Gas industry perspective... and most importantly 3)Cost vs. benefit perspective.
From Hemi's perspective, how does the company benefit from spending a boatload of money on trying to stop the naked shorting? Would spending that money add a single dime to the bottom line? Not likely. It would be huge expenditure, which may or may not work, and then in the end gives no ROI for the expenditure. Translation: Dilution
While the MMs might be forced to cover, there would likely be a run temporarily. Many would turn some profit I'm sure. But Hemi wouldn't get a thing out of it, except a bunch of emails complaining that they're diluting.
From a gas and oil industry perspective, what are the priorties there? Are they in the business of babysitting their share price or are they in the business of finding and making the most of oil and gas? If they lay out that big expenditure to try and stop the naked shorting, not only is there no ROI on that money, but it is compounded by leaving less money available to acquire leases, and/or prove up reserves. It takes money away from operations and any activities that are actually profitable for the company. What's more, with Hemi's plan to be attractive for a buyout, if they're not out there proving up their reserves and moving ahead with growing the business itself, and instead just spending money to quiet shareholders, they'll get no respect or trust from the Oil and Gas industry. They'll have a hard time being attractive with not much to show in the way of leases and reserves.
I guess I already covered cost vs. benefit....
Like I said... we're coming down to the wire. There may have been a time when Hemi could over time absorb the cost of attempting to put the kabosh on naked shorting, but then by now they MMs would be right back at it anyway. It would still be occurring. And Hemi left with nothing to show for it, and in the exact same boat they find themselves now when it comes to criticism.
If they start laying out those types of expenditures this late in the game they won't have time left to absorb the effects, and all it will do is take money away from their drilling that is just ramping up, and take away from proving up their reserves... and in the end take away from being prepared for a buyout.
As it is now, every new well means increased production. They are still debt free. That means they're still getting enough production to pay their way. The more they drill, the more they have at their disposal to pick up the pace for proving reserves... and the better information that will come out of that independent reserves report/update.
Hemi, IMO has rightfully always put making the business as successful as possible (from an industry perspective) at the #1 priority.
By doing that, they are really doing the best thing they can do in the long run, for both the business itself, and for all the shareholders. Does that mean it caters to every kind of trading strategy? Of course not. But it IS catering to the most profitable trading strategy. Hemi has always said their business plan is unique. Most seem to miss this simple tidbit and still insist on viewing Hemi as a typical pink sheet stock, which should only be traded like a typical pink sheet stock.
Personally, I think that is very narrow thinking.
Keith and crew can make far far more $$ in the long run with this buyout scenario than they ever could have hoped to get by trying to run some scam (as some would just love to claim). Their shares came out of the same 100MM shares that all the rest of our shares came out of (except for all those phantom shares, but that's not this post). Hemi management has EVERY reason, EVERY incentive to see their plan through in the best way possible.
