I’ve been thinking about the shorting that has been going on over the last few weeks and clearly the manipulation that accompanies it is making it worth while for those involved.
When you think about it, this stock is basically 100% or near enough, retail. Over 10,000 people have positions in this company and all will have differing expectations and financial circumstances. There is very little or nil institutional ballast to right the ship in heavy weather. There are doubtless subsets within the SH group, some who are interested in a quick buck, some who may have highly geared positions or margin loans, long termers like me happy to wait until maturity, dividends and so on.
In order to make a buck, the short sellers are not fools, dickheads maybe, but not total fools, and they have a strategy that looks to be working, as there appears to have been a massive sell off for absolutely no reason, presumably other than sheer panic. Shorting works for those that do it. If it didn’t no-one would do it, but their job is made much easier by shareholders who panic and lack conviction. The internet and social media has made the task of sewing doubt and misinformation incredibly easy. Why anyone is on Twitter defeats me, but that’s another story.
Shorters are pond slime, but slime is robust and thrives in environments where other life forms struggle. Their presence has only really been an issue since there was the run in the SP a few weeks ago and the company made it into some index (can’t recall which one), thus falling prey to these parasites as stock became available to be “borrowed”.
THE FUNDAMENTALS OF THE COMPANY REMAIN UNCHANGED PEOPLE, so why the f**k is there any panic selling.
Has ADN management been lying for the last two years? Is the mining application before the SA Government a mirage? Is James Marsh an alien life form sent down to run a ponzi scheme, generate fake news and eat our children as well? Was the moon landing created in a Hollywood basement? Does COVID-19 come via the 5G network? I don’t think so. Everybody needs to take a deep breath and stop freaking out.
The short term problem as I see it is that until there is mining approval and commencement, product being produced and sold generating an income stream etc, the day to day SP is very dependent on sentiment and news flow. Good news, up she goes, a pause in the news flow and down she goes with the pond slime aiding and abetting. We’re in a quiet period because things are simmering quietly ahead of major developments that are just around the corner. We’re at the end of April and the DFS is due this quarter. Feb 2022 gets closer with every passing day, but I’ve felt for some time that a pull-back was likely during this period of mounting expectations and nothing much to add from the company.
I have 4 million shares dating in part, back to the Adelaide Resources days, and all that’s holding me back from buying more at these prices is a distinct lack of cash in my superfund. I’m in this for the long term. We had a glimpse of the future a few weeks back and it felt good. Today was a bummer to be sure, but in the scheme of things it doesn’t matter other than the effect it may have of further spooking the horses.
We all just need to follow the example set by the cool heads on this forum and ignore the pond slime. There is more short term volatility ahead I’m sure, but unless there’s a black swan-like catastrophe, this company is poised to shoot the lights out, and soon.
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