Dog, the preferred holders are owed 300K each quarter and this debt is paid in shares for the time being. It's about ten million shares. It would be really,really good news if Elite was to announce they paid this debt in cash. I'm hoping that time will come but it hasn't yet so we have to deal with it.
You can prove to yourself that the preferred owners are not holding this stock by looking at the filings. Midsummer for example should show a net gain of at least 20 million shares per year if they were holding. Instead their position has decreased to under 8 million. It's never increased so they have never held these shares for very long.
I assume they are shorting because that seems to be the preferred way for big players to move a bunch of stock. They probably have a standing arrangement with a market maker -say CDHN- to short as much as possible into any price rise and then they cover when they take possession of the shares at the beginning of each quarter. That's why there is never a real short squeeze. They have the shares to cover already. So its' not shorting in the retail sense of the word. Shorting via a MM is just a more flexible way to unload their positions.
They apparently have more use for cash than Elite stock. That would be their opinion, not mine. I also speculated before that these guys may have an axe to grind with Elite because they were not happy to be squeezed out of the peak seat when Elite made it's deal- also in shares- with Epic. The C and D holders had the majority stake before Epic came in. Their stake was diluted and they sued for parity and won.
Their deal is not as sweet as it once was and now they are just lashing out. Two things would change this dynamic, one being really good news and the other being Elite paying them in cash so they have no more shares to play with,
Best to you,pbk
