The biggest factor with ASM all year has been the short selling. I am waiting for the aggregate short chart showing the situation as of the 9th Nov (due out tomorrow) to get some sort of idea how things might proceed in the next couple of months.
Since the CR shares were allocated at close of business on the 8th if the shorts were supplied the outstanding short position will have largely reduced on the 9th.
It is important to me for a couple of reasons. If the shorts have not covered then I think the likely scenario is the SP of ASM has bottomed... so any good news might bring on some forced buying from the shorts if they can not contain the price.
The flip side is quite different (as I analyse things).... If they did cover then they have locked in a very substantial profit (in excess of $30M by my calculations).... so they will then be in the position of having access to several million shares to borrow (i.e. they have been reloaded by the CR) and no overhang of risk. Meaning they might continue to successfully attack the SP (in the absence of good announcements).
Secondly.... Some months ago I emailed the management with my concerns about the short position (and the obvious manipulation) and after 2 weeks received a polite but useless and irrelevant reply. I am certain other shareholders will have also voiced their concerns to management. If it turns out ASM has not supervised the register and spent the time and effort to know who has been trading several millions of shares to the detriment of the SP I consider that dereliction of duty.
There is nothing management can do about short selling but they can and should know who is doing it. If the shorts covered in the CR it tells me that management are incapable of protecting my interests and I will adapt my personal trading strategy accordingly.
If the short position remains around the 5% mark I think the current SP is a safe entry.... if the shorts have largely covered I think the SP remains vulnerable to further lows.
All of the above is just my opinion and I post it in the spirit of discussion on the forum. I would welcome hearing how others analyse this.
ASM Price at posting:
$1.96 Sentiment: Hold Disclosure: Held
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