It probably doesn't matter what level they drive it down to, there will always be another level of support to push past in the hope of triggering a stop loss run. The thing is I don't think the strategy has worked too well at all the other levels, because there just aren't the sellers in the long term holders - which is why the short level just doesn't seem to drop much, except the one time there was a big seller - Blackrock - when the shorts actually did drop.
Maybe they dropped because Blackrock was a lender, maybe they dropped because some shorters were able to buy back from someone other than other shorters. No way to be sure.
Obviously the longs and the shorts have seriously different views on the company. The shorts have the advantage in that they can use the resources of the longs to find more shares to sell, and can recycle those shares over and over, while the longs have to use cash and have a finite limit on how much they can pour into it to keep up the price. The horizons are clearly different as well, most longs (at least on here) are looking 1 to 5 years into the future, while the shorts are looking maybe a week to a few months into the future.
They are simply not going to mesh - longs are happy to let it fall a bit to accumulate on the lower prices, the shorts are desperate to trigger a cascade of longs giving up - which just doesn't look like it will happen.
I don't know, but I think if we were talking any other industry or resource but Li, the longs would have scored a clear undeniable victory by now and the share price would have been in cents, but the longs are glued on to this company so it has become a bloody war of attrition extending over more than a year.
Its getting really, really ugly though. I'd love to know who is doing the defense now though, because they are spending a lot of money day in day out making the shorts blow heaps of cash to eek out the few cents downward movement. I can't understand why they are just sitting there most of the time acting as a sea anchor rather than attacking. Well I can, but it means that they are booking losses now each day while they soak up the shorts and force them to bring ever larger quantities of shares to bare on the market.
Assuming the shorts are conventionally motivated - ie. the kind of rationale you would get in a classroom (rather than the suppress-price-for-takeover-conspiracy motivation discussed already), I guess they are banking on:
- China slowdown means lower EV car sales, means lower battery demand, means lower spod prices
- Tradewar not going to resolve soon so China US cash supplies short and China economy going to get worse - so lower spod sales
- Rest of world entering slowdown - so lower spod sales
- A40 not going to resolve soon so no upside from that soon, and could go against GXY even if it does, so cash burn from equity side at least likely to happen
- SDV ... well nothing so far so not going to make a difference, and if it does it will be a year or two before conventional ponds are relevant
- AGW is not being taken seriously by most countries and the population so not a significant factor in driving battery take-up
- Other Li producers will fail soon, so market sentiment will decline further
- GXY is losing money becuase spod prices are too low
- World on the brink of a major war in the middle east which will push EV sales into the background
- Trump will get "done" and the world economy will spin into disaster as the Dem's alternatives are extreme leftists who will tax the US into oblivion and market sentiment will collapse
- No bookings after this month for MtC so no sales until the end of the year (because October was the last one mentioned in the forward projections a few months ago)
- The upcoming qtrly report is going to be embarrassing
- EV demand in the future is, well in the future and may never happen 'cuz EV's are crap.
Whereas the longs are thinking:
- China slowdown doesn't seem to be impacting EV sales because they are being forced by Chinese Gov legislation and needed to control serious pollution problems in China, means higher spod prices
- Tradewar is going to resolve soon so China US cash supplies will return as China economy going to get much worse if it doesn't - so spod sales, and world sentiment will return with a bang
- Rest of world entering slowdown - so lower spod sales, but part of that is the reduction in car sales because consumers are increasingly switching to an expectation of their next care being electric and waiting for the right priced options which will appear next year and progressively from now, so higher spod sales, and China trade war resolving will mean higher market sentiment
- A40 will resolve early next year with a merger of A40 and GXY, bringing A40 shareholders onto GXY register and a much bigger company with much expended reserves, while in the meantime A40 customers are going to have to buy from GXY, and regardless GXY is earning a significant profit off the cash debt as it is secured over the entire assets of A40 - which means they will have to agree to a deal or lose everything.
- SDV is going to be announced in a few weeks (maybe couple of months) as a new tech direct extraction solution coming to production in less than a year
- AGW is being taken seriously by enough countries but it doesn't matter anyway, because the conventional pollution reduction benefits of EV's in cities, the self driving car fleet opportunities, and the lower total ownership costs are becoming increasingly obvious to everyone - especially Governments, combined with the improved tracking that the cares offer authorities.
- Other Li producers will fail soon, so fewer suppliers means higher demand for GXY output.
- GXY is making money while others aren't because spod prices are low but easily above MtC's cost of operations, and the falling Oz Dollar means that situation is improving regardless of any other operational improvements - but it is not obvious from the previous accounts because GXY was offline for part of the last year, producing at lower volumes than today and is spending on multiple mine developments and has an administration sized accordingly.
- World on the brink of a major war in the middle east which will result in 50% collapse in oil supplies sending oil prices through the roof because the first things to be taken out will be the Saudi oil facilities and its allies, making even expensive EV's look cheap.
- Trump will not get "done" and when the current attack fails, market sentiment will jump and the Chinese will rush to secure a trade deal before the election, since waiting until afterwards would prove disadvantageous
- There will be more bookings after this month for MtC running between 15kt and 30kt per month until the end of the year as this is the high demand part of the year.
- The upcoming qtrly report is going to be excellent, with 60kt worth of sales, higher profits (because cash costs were absorbed in the previous qtryly, and .. well...record sales in a Qtr) and the outlook comments are going to be positive.
-EV demand is now and will have to grow insanely in the future (well, at least, spod demand will have to grow insanely to meet the EV demand growth), and the future has started now...and
- There just might be a share buy back announced.
The question is, as always, who has it right? The longs or the Shorts?
It doesn't require all of the longs' views to be right for the shorts to be seriously wrong.
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