Were that the case (note, in the subjunctive tense, meaning hypothetical, not a prediction), where holders of short positions of AVXL shares (which they don’t own, are merely “borrowed” for a time) would need to “cover” their positions, meaning they’d have to buy real shares to return the ones they had on loan, here’s the percentage of the outstanding shares that would be involved.
IHUB states that 77,380,000 shares are in the float, owned by shareholders. If 15,000,000 had to be quickly purchased to cover open short positions, that would be 19.38% of the shares in trade. At today’s close, Schwab states that 909,581 shares traded today.
If holders of short positions are forced to cover their short holdings of AVXL, to a total of 15 million shares purchased, please tell: Over how many days would those purchases occur? Were it a week (five days), that would create a daily trade volume averaging 3 million shares each day (compared to today’s 0.9 million).
What will happen to the AVXL share price when daily trading volume hits, say, 3,000,000, for five straight days?
The short squeeze phenomenon. Will be interesting to see if this ever occurs. For owners of long AVXL positions, it would be rewarding.
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