Shadow boxer.... A question. Can't a person with a large short position simply cover by being a 'sophisticated investor' and being involved in a capital raising
If I had a squillion dollars, was qualified as a SI, and thought a company was short of cash or going backwards, I could short the cr@p out of a stock, assisting in driving the price down, and simply tell my broker if they do a CR I want to buy the amount of shares I need to cover. The falling price would even possibly bring forward the CR date as the directors attempt to get the funds raised before the share price goes even lower... In effect forcing their hand. The point being, I would probably never have to cover on market.
Not that I have a squillion dollars... Or have ever shorted a stock ...yet.
The downside would be, if the directors are smart and outsmart me with another strategy, pulling the infamous rabbit out of the hat.
In cudeco's case... This could be that the suspension is delaying the CR until the rabbit is out. For example, the infamous ore sorter operational, sales starting, or perhaps the company staying in suspension until the HK listing happens. If it lists in HK, who knows what could happen to the share price... It could go nuts with a few thousand Chinese investors playing silly buggers and rise to 10 dollars, or simply do nothing.
Alternatively... The company could be having real trouble raising even a few million and go into liquidation, and the major lenders take control at fire sale prices.
I'm neither short nor long., and am glad I'm not either of these. It's interesting though sitting on the sidelines and watching yet another episode of the cudeco soap opera.
Best of luck to all those who are holding shares.. ..... To those who are short though.... Well I don't like the concept of shorting, so I can't really say anything to those ppl. I think shorting doesnt really help with markets being more efficient with price discovery and all that guff in companies with a market cap below a few billion, I think it just provides an opportunity for short and medium term market manipulation for the big boys. But that's just my opinion....
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