Shorting after news like Tuesday morning is all about shorter mistrust of management. Shorters are betting FA that management will miss their guidance - it's as simple as this. Shorters will be toasted and sp will rocket if H1 results come in strong and management reaffirms FY guidance, let alone running ahead of it, so they're betting H1 will disappoint. Shorter logic is that problems for businesses don't usually come in isolation, and management said Q1 was bit disappointing due Brexit delays, adverse currency moves, Conject handover, oil price slowing decision making in Mid East. So shorters thinking Q2 may have more problems too, and guidance issued Tuesday not to be trusted. Shorters usually haven't met management, so the mistrust is not personal it's just pattern recognition. Here you also have the (<4% of holdings) director sales in September which a lot of shorters also see as a signal. I tend to think management will exceed guidance because that's what they've done since IPO (i.e. they've tended be over-conservative), and we are well into the year for them to be able to give it accurately. ACX highly diversified by sector and region and so high growth in Americas and Asia can offset slower growth elsewhere, and management have high forward visibility on revenues and costs to give guidance.
If you want an explanation for the fall today, I don't know. Maybe some or all:
- Fish has a lot of followers who took his lead and it snowballed ;)
- the fact that most of Melbourne is on holiday today, so it's an uneven trading day
- a correction to ACX being well up again after Tuesday last week when market well down
- someone raised Trump, I don't think this is it - his chances still rated <20% there hasn't been much change since the latest FBI development
http://www.realclearpolitics.com/epolls/writeup/us_presidential_election_live_betting_odds.html
and his election would affect other stocks too
- more shorting - will be able to see stats in 4 days
- just random market noise presenting an opportunity for some
