CXO (ASX) Banter and general comments

Originally posted by WhatsTheTip: ↑

At the risk of being contradictory, lets talk about shorts.

There are two types of shorts, naked shorts which can be incredibly dangerous to the share price but also enable legendary squeezes and covered shorts. ASX only allows covered shorts. In covered shorts, company A buys or company B already owns shares. They then lends these shares to company C. Company C then sells these shares and become a shorter. If shorts go up, it either means more "Company A's" are buying shares so that they can on-lend them or more company B's are lending out their shares. Typically company C will pay a fee of some sort to obtain the shares. If the shorter becomes negative in their position, they will provide either cash or some sort of security. As we know, they make gains if the price falls.

Digression - While there are many analysts and pretend analysts that put a value on companies, fundamentally the share price comes down to whether there are more sellers or buyers because the key word in share market is "market". If there are more sellers, the price goes down. If there are more buyers, the price goes up. If you could create a sentiment meter for the Core threads at present, its as low as its been. If this sentiment is reflective of all Core retail shareholders then you would expect more sellers than buyers and a declining share price until there is just too much value available and the selling dries up/buying emerges.

I've seen it reported that 70% of Core's share register is retail meaning only 30% is institutional. Only some institutions will be prepared to enter into arrangements with entities who actively will want the share price to decline while they would prefer it to increase. Given the small institutional shareholding and the high level of shorts I think its a fair assumption that existing institutional type Company B holders have been tapped out. Any increase in shorts comes from Company A's. This however means the transaction for a 19m (1%) increase in shorts is Company A buys 19m of shares and holds them on their own account. They then enter an agreement with company C. Company C then sells these 19m shares. There was just a buy and sell of an equal volume of shares onmarket. Except for nutcase explanations this will not push the share price down. Unfortunately when this top layer of shorts unwinds it won't help the share price (sorry) as Company A will probably sell their no-longer lent shares.

So fundamentally I don't believe this high level of shorts is pushing the share price down. Companies like State Street are buying shares to supply shorters and presuming the combination of fees charged and expected positive returns will make the purchase profitable. Inherently they actually want the price to go up not down as they are long in the stock like retail.

With HC shorters are being ascribed legendary investment status by some posters that IMO should be reserved for the likes of Warren Buffett. Shorters must love what's happening on HC because the more oxygen they are given by being talked about, the easier their job is (so it is ironic this whole post is about them!!). They know their best chance is scaring retail investors into not buying and to get existing shareholders to sell. This will tip the supply/demand balance and lower the share price. The more their skills/knowledge are pumped up, the better (for them). Bad company announcements certainly help this occur. Right now, multiple HC posters are talking up shorters investment abilities, indicating high shorts makes Core a poor investment and basically working for the shorters in creating panic. While many are Core shareholders, they might as well be posting - please share price fall some more. As noted above, its my opinion that increase in shorts isn't creating new selling pushing the share price down, but retail shareholders fearing the high short volume is helping the share price fall as they sell/don't buy.

What would stuff the shorters the most is if the HC chat channels started to refill with content looking at the positives Core has and there are lots. While its as toxic/negative as it currently is, they know that retail investors generally having the conviction to maintain their holdings / add to their holdings is unlikely.

Expand

Thank you... for sorting the wheat from the chaff..... This post should be stickied somewhere and people who claim its always the shorts and there is always going to be a short squeeze, should forced to read it before posting.

Shorting is a bet the same as going Long. its just a bet the other way.

No.	Vol.	Price($)
101	7932924	10.5¢

No.

Vol.

Price($)

101

7932924

10.5¢

Price($)	Vol.	No.
11.0¢	1975375	18

Price($)

Vol.

No.

11.0¢

1975375

No.	Vol.	Price($)
101	7932924	0.105
177	9235001	0.100
8	298868	0.099
7	109339	0.098
5	107228	0.097

No.

Vol.

Price($)

101

7932924

0.105

177

9235001

0.100

298868

0.099

109339

0.098

107228

0.097

Price($)	Vol.	No.
0.110	1975375	18
0.115	2198772	25
0.120	7158563	56
0.125	4559735	62
0.130	3840170	56

Price($)

Vol.

No.

0.110

1975375

0.115

2198772

0.120

7158563

0.125

4559735

0.130

3840170

(20min delay)
Last 10.5¢		Change -0.005(4.55%)		Mkt cap ! $225.0M

Open	High	Low	Value	Volume
11.0¢	11.3¢	10.5¢	$1.015M	9.421M

Banter and general comments, page-30572

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