I've been saying for MONTHS that short sellers can cover off market via dark pools, but I suspect people have been ignoring it and just hoping for a massive short squeeze.
It ain't gonna happen!
Most of the short covering is almost certainly pre-arranged. Insto X bought LYC at, say, 30c ages ago. They lend a load of stock to Insto Y (or a collusion of instos) when the price is at, say 80c, and make a nice little earner from the loan fees.
Insto(s) Y then short the stock, using bots and HFT to walk the price down so they cannot lose. A self-fulfilling prophecy. They don't bet that the price may go down. They MAKE the price go down. Easily done.
Then, when the price is about 59-60c, they honour their original agreement and return the shares to Insto X. WHO THEN SELL THEM! More and more supply coming onto the Sell side - which is what we're seeing.
So - Insto X has made the loan fees plus doubled their original investment from 30c to 60c, and Insto(s) Y have made the profit from the shorting from 80c to 60c.
And of course, who's to say that Instos X and Y are not part of the same conglomerate/merchant bank/hedge fund/etc?
It all stinks, and it is NOT simply conspiracy theory - it is what happens now!
So don't be holding your breath for a massive short squeeze on the open market.....
LYC Price at posting:
61.0¢ Sentiment: LT Buy Disclosure: Held
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