Wrinkles,
I would not be putting sell orders at 20 cents on my own account. Of course, that would be a HUGE return and you should do what you think best. Just saying I would not do it.
There is a possibility of a major run that blows well past that level.
"WTH" you ask. Well, what if the short is unable to cover without purchasing shares from Furth+BMAS+insiders? And let's say that there is an event that makes it an absolute necessity for the shorts to cover. So, they sit down at the table. The shorts recognize that they must buy something that Furth has. How much would Furth ask? He can ask for whatever price he wants, basically. He does not have to quote them a price related to any fundamentals whatsoever. So, Furth says $5 and the shorts head home to deliberate and drink. At that point, what would your shares be worth? (Another important question is what would they be worth the day after Furth cuts a deal?)
Now, I have no idea whether this will happen. Has Furth cornered the short and how securely is the short cornered? Has BMAS largely cornered the short as well? Is RME selling shares in a manner that would undercut this scenario? Would SPNG issue new shares to underbid Furth? What would really force the shorts to the bargaining table? Etc, etc.
There is NO WAY of determining the answers to these questions. Some reliable posters on this board say or hint that this is what is going on.
My strategy is to recover my initial investment by selling a small fraction of my position at a price over 20 cents. I am going to hold the rest of my shares in hopes of striking it seriously rich.
I look at it this way. If the company delivers on the fundamentals and if they can make good headway on reducing the RME share count over the next 18 months, then we are looking at earnings that could be in the range of 10 cents -- or with very, very high probability over 4 cents. Any kind of reasonable multiple will then give us a great return on our investments.
I think there is also a 50-50 chance of a spectacular return.
There is also the chance that they start failing to deliver orders, people lose interest, the company dilutes the heck out of the stock, they announce major accounting errors, management goes down in an airplane crash, etc, etc. You know what they say about the best laid plans... I put this domesday scenario at less than a 10 percent probability.
So, the expected value calculation is:
EV = $0 * .10 + $0.20 * .40 + $1 * .50 = $0.58
(I am just making up these probabilities and prices -- they are totally subjective), but the equation makes clear where I am coming from on this investment -- and why I would not have a GTC sell order on my shares at anywhere near 20 cents.
IF management would just give us peons more info on the share structure and ownership, then I would have even greater confidence in the spectacular scenario really coming true.
Wadi Rum (there is a TON of speculation in this post)
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