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seaeagle90

91 Posts.

1

13/03/17

21:09

Post #: 23313215
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Originally posted by Foglefar ↑

Hi Seaeagle90

Here are my thoughts and deductions on the unprecedented shorting of ORE and the resultant ‘serious disconnection between the share price and true performance’ (as you put it).

1. What shorters look for in a stock
- medium daily volumes so their trades can easily dominate. Too small volumes and large investments can’t be traded. Too large a volume and the cost of dominance is too great or just not feasible.
- high percentage of retail / ma and pa shareholders (who use more stop losses and scare easily and can be herded with sentiment influence - they don’t have a strong FA understanding)
- a stock with weakness (not on a bull surge) or going sideways or near a resistance level but not a failing stock otherwise the lender won't want to remain in the stock when it gets returned (they want the rebound)
- a stock that already has a high percentage of shorters.

2. Motives for shorting ORE
- To make easy money. If you have the ability to dominate the trading and manipulate to gain a regular 20%+ return every week on multiple $mil sums you would be crazy not to do it. That’s putting all ethics aside and assuming the regulatory body (ASX) permits it - which they do.
- Accumulation. By driving the sp down, these same shorting investors may also be accumulating ORE shares at bargain prices - they know the mid-term value.
- Weaken a competitor. To slow the growth of ORE. I am confident there are at least a few competitors who would have a fighting fund for this purpose and stand to benefit directly and indirectly.
- Perhaps to soften ORE in advance of a takeover. But the pre-emptive rights (as Niu explained) that are held by TTC probably diminish this possibility.

3. Tactics of shorters with ORE
- Use bots for trading down the sp.
- Shorters attract shorters like wolves around a wounded beast. - Shorters appear to be organised and coordinated in their attacks. The fact that UBS AG can cycle so many shorts every few days indicates a level of organisation. Their activity probably attracts other shorters in a casual alliance.
- Hit stop losses to create a sp cascade.
- Sell down to themselves so they don’t lose but the sp drops. Rinse & repeat.
- Because the shorters’ prey on ma & pa, they will also have shill posters in the forums and PR active in social media paid to create negative rumour, influence sentiment and create doubt. This is a cost effective support for the shorters and competitors. I put JL and a two or three posters in this ORE forum in this category. You know who you are!

4. Who is shorting ORE?
- sophisticated investors, institutions - I suspect there’s not many retail investors because they don’t have access to the lenders and have to pay trading fees so the use of bots to manipulate becomes uneconomical.
- lithium competitors, both producing and those gearing up for production stand to benefit from hindering ORE.
- neighbouring governments in the lithium triangle who want to reduce the head start and momentum that Argentina has already gained.
- oil companies and governments with a large national interest in oil. It would be naive to think, that with the potential $billions involved in the lithium triangle and with many companies/govts security based on the future of oil now threatened by Li, that these parties would not be active, by whatever means necessary, to protect their interests. It’s not paranoid - it’s common sense. We already know that these corporations and governments behave like that.

In summary, I would observe that the shorting (and current SP) has very little or to do with ORE’s small delays and relatively minor issues. These are expected and the norm in such an ambitious start-up. These have merely been exploited and exaggerated by the posters mentioned in #3 above.
I trade a portion of my ORE holdings (currently growing elsewhere) and the largest% of my portfolio is currently held (tightly) in ORE because I am confident that the sp will be north of $5 within months.

I welcome input from others with more knowledge of shorting than me to correct or add.

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Foglefar,
The effort and insight in your reply is much appreciated.
While I don't have specific questions at present, I'll more than likely be in touch shortly once I absorb your many points.
Regards

ORE Price at posting: $2.80 Sentiment: Hold Disclosure: Held
2 Upvote

0 Great analysis

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