Been a lot of chatter about shorts and shares on issue etc. While everyone is entitled to their own opinions and theories, in the big picture it simply does not matter.
Shorts:There are two kinds of short players; those who want to make money from the stock price going down, and those who are using it as risk management, known as hedging. Players who short for a profit is simple - they 'hire' in stock at a certain rate(X) per hour/day/week, they then sell(A) this stock to someone else and then they buy(B) it back at a lower price and return it to the hirer. The difference between their sale and their buy is their profit (minus the hire price). [A-B-X=profit]. It is these players who are at risk of the market going against them, because if they are forced to return their stock to the hirer but their re-buy price(B) is higher than their original sell price(A) then they end up with negative profit, or a loss. All investing carries risk, hence the saying only invest what you can afford to lose. However short selling, like investing in futures, you can lose significantly more than you risk. You need collateral like businesses and property etc to be able to do it in any sort of large way. Retail traders who have access to short trading are also at the same risk, however brokers implement margin call strategies to limit this risk. Be assured though, in the fine print retail will likely find they are in a world of hurt should the market go against them suddenly before the broker can exit their position on their behalf via Margin call/Stop loss arrangements. Due to the risk, it is likely that only a small portion of the short positions are naked shorts with this risk. The move has happened, there is nothing left to short, and the fundamentals are even more against them. They aren't even able to rely on being kicked out of an index any more.
The second type of short position is a risk management strategy. If a player holds 10 mill shares long(+10) and then enters a short position with another 10mill shared (-10) then regardless of where the price goes they are at zero risk (outside of their initial buy/sell/hire fee arrangements). This is because if the price goes up $1, they have made $10mil on their buy, but lost $10mill on their sell. And the same in reverse if the price drops; its a net-0 game. Why would anyone want to do this? Because it is easier to accumulate shares now and build a large position. Until Imugene signs contracts and brings in revenue, it is still a risk play, no matter how much we all believe in the company. After those events though, these large players can confidently close out their short positions knowing that the bulk of the future value is yet to come. They may loose that first $1 on their 10mill short position, however if it's going to $8 over 10 years with very little risk due to a solid revenue stream, then they are the winners. And by their initial shorting, they mitigate the risk now against the unknowns, things like trial failure, CEO & board go down in a plane crash, WW3 or whatever. Hedging is a risk mitigation strategy - I've used it trading forex. You can buy and sell the same pair at the same time - useful for news. For example leading up to an interest rate announcement. Raising or lower rates can effect a currency for months ahead, but because you are in the market both ways you can close out your losing position easily and hold onto the winning one. The numbers flying around, of % shorts and their increase decrease with the volumes being traded indicate that the majority of the short positions taken are large chunks. This most likely indicates the hedge side of things. They will disappear like they appear - off market ghosts that hardly move the price.
My ppersonal view is - I just don't care what the short % is. It does not have a material effect on the share price or my view of the company. Getting held up on shorts is a waste of time.
Shares on issue:
Imo, this discussion is even more fruitless than shorts. The amount of shares on issue is of zero concern imo (to clarify, I am not talking about dilution, I am simply referring to the number of shares). The only people who care about the amount of shares on issue are retail - and only a subset of them. The big players couldn't care any less about shares on issue. They are interested in Market cap and percentages. If they want invest $10mill in Imugene, they couldn't give a rats if their money bought them 100mil shares or just 100k. In the same way, large SOI is not a drag on the share price. The price is simply a result of the market cap. For the sake of argument - IMU has 8bil shares sitting at 10c (800mill MC) . Let's say it will take $10mill of buys to clear 10c. Now let's assume that IMU has 1/10 of the SOI - 800mil at $1.00(800mill MC). It will still take the same $10mill to clear $1.00. It takes the same amount of money to move a MC in a company with high SOI as it does to move the same company if they had a low SOI. If you have 3 companies to invest in that all have equal potential, do you buy 100k shares in each one regardless of their price or do you put 1/3 of your funds into each one (and if you are ocd like me find some change in the couch and round up to a nice neat number)? I bet your thoughts are more on the money going in than the specific number of shares you are getting.
If you just want to simply your investing and focus on the big picture with less stress, forget shorts and forget SOI. Just focus on the MC and the fundamentals. Speaking about the big picture, so far so good.
Let's update the prior analysis (found here) to reflect the current picture.
Weekly First week of December down. Typically December is a poor performer, as is January. The only caveat to Jan is the JPMorgan conference, if the cf33 data is new to the investors there and they like what they hear then we might get some Jan movement. The AGM was uneventful which was good news from a technical perspective. We're also benefiting from the churn post news, at the bottom of this mammoth long term down trend. Trend changes of this magnitude take time all the MA's need to turn around and start heading upwards. Look at any chart - 99.9% of the time the large MA's are smooth curved and rarely have kicks and kinks in them, especially on larger time frames (outside of significant events like takeovers and deals etc). It takes time to turn a MA, time in the form of a ranging market which is common for Dec/Jan and even Feb. Time in the form of consolidation and distribution. When these phases run their course, it is my view that we will finally see some bull momentum moves. I think if the powers that be can drop something real juicy in early march we could easily be on the fast track to all time highs before mid year.
The cchart below shows the yellow e21 has moved up to offer a double whammy support with the 61.8% fib. Our range (for weekly closes) are currently between the e21 and the e55(cyan). All MA's are flattening out ready to turn northward. Key resistance levels are 0.00% @0.150, s200 @. 0178 and the old faithful Nov21 61.8% @ 24.5
Daily
Current target remains D1 at 0.220 with interim move to 0.150. See prior analysis for target commentary. Lots of positives on this chart now - Great to see the e21(yellow) acting as solid support. Price will hopefully use it as a bumper to 0.15. Day closed out above the dark red s200 (strongest MA support/resistance) Let's see if next week we can use it as our new support. Green w5 has turned up - this is my buy signal (when combined with others) when looking at a new move. e55(cyan) is about to cross over the e100(blue) and get back into Bull order (first time since Jan 22 @0.425). Fib move one track and playing out as hoped. We've closed above the 50 as well, eyes on the 38.2% next.
We all want this to run, but slow and steady really does win the race here. I'm pretty happy with recent movement and the chart has the appearance of a genuine turn around. Not expecting it to be without its own intricacies however it looks promising at this stage.
(20min delay)
