global placements... an alternate theory

Global disposals - an alternate theory
Short selling is not all bad IMHO...

There are several possible scenario's to explain global/aitco/easyoffice's activities. I personally am prepared to rule out completely that they have bought and sold at a 50% loss within a few weeks.

All of the theories that involve short selling or rather lending the shares to someone who is going to short them seem to have a negative spin. But what if the intent behind this is to seed a cover rally? Remember all shares that are shorted must be covered at some point and if the price rises above the short price then the shorting party who borrowed the shares must keep putting up collateral to stay within margin. Also remember that in long buying the maximum downside is 100% loss of capital with unlimited upside risk. Is short selling maximum profit is 100% with theoretically infinite potential for losses. It's a dangerous game.

Now if Global/Aitco/Easyoffice are confident of a move upwards and think it will happen in euphoric stages what better way to double up on the euphoria than than to add capitulation of shorts being covered in a panic? For all we know those in the know could have been buying up those short sells all the way down. Have a look a 25 period MA of the volume you can see a fairly consisten 5.2m/day for the first 6 months of the year. Since the Pensador ann it's been consistently about 2m/day higher. Could his indicate accumulation of the shorts along with the incidental panic sells of other holders?

So under this scenario the shorts are gaining larger and larger positions, the global crew are seeding their volume by both lending he stock for them to short and buying some of it back from them as they short sell it (at the same time preventing a total price collapse)... Imagine for a moment the perfect storm. Announcments re: Falcon/Pensador etc... Insto's begin buying, retail investors regain confidence, price begins to move northward at which point the shorts begin looking for an exit but if the global crew stop trading at this point and pull their volume from the market (they are theoretically trading a much larger timeframe than the shorting parties and may not wan to sell as quickly as the shorter want to buy) suddenly we have many millions of shares that HAVE to be covered. Covering a short is not like buying into a stock, if you approach margin you don't necessarilly have the option of waiting for a retracement you may be forced to cover very quickly in less than optimum market conditions... The end result of this... Probably a lot of botles of Bollinger for holders...

It's all conjecture at the moment but it's one theory amonst the many that I've been toying with... Global and friends know very well that short selling is bad for a stock in the short term but they also know in the long run the shorts must be covered... It's just a question of who's got the better game, Global or the short sellers...