Regal is a hedge fund that goes long and short. People associate Regal appearing on the share register as meaning they have borrowed the shares to short but this case they are long.
When hedge funds short stocks they often make their investing thesis public. If they have a good case she share price will decline but they have to be right. I have an investment in Fairfax Financial (Canadian stock). Last year the share price dropped I think from $1400 per share to $1200 when a shorter published their thesis. It’s now around $2000 per share as the market ended up not buying the thesis. It’s not the shorter who smashes the stock, it’s whether they are right or not. George Soros famously “broke the Sterling” and copped a lot of flack - but as he said later the British pound was unsustainable and it was going to decline anyway - he just brought the process forwards.
I’ve been looking at this stock via the interview with Alan Kohler ( I subscribe to the Eureka report). My interest was piqued at the gross profit margin of 60%. However looking at the financials this is for material inputs not including labour so it’s not really a gross profit. The labour costs are quite opaque. I don’t a have a good track record in investing in this kind of company (early stage, likely capital intensive). so I’m going to giving It a pass though I hope it all pans out. The technology certainly sounds fantastic.
AL3 Price at posting:
18.0¢ Sentiment: None Disclosure: Not Held
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