Plenty of trading on the ASX is momentum trading, the shorters chase down an out of favour stock and collectively push it lower and make money off it before exiting the position. There's relatively low risk with Mesoblast that it's going to shoot up at any point soon, the news timing is well known, so they can play a little longer before they have to close their positions.
Then they flip as the good news comes, and ride the momentum back up trading in and out. Basically an army of Catos doing their thing.
If you look at the risks, the two major upcoming news are Type A meeting for GVHD and covid trial results. Mesoblast has been clear about when to expect Covid results. For the Type A, the only news that would rocket the share price is a quick acceptance, but check out how long it sometimes takes to go from a CRL to a type A to conditional approval... here's one example:
April 2019, CRL received -
https://evokepharmainc.gcs-web.com/news-releases/news-release-details/evoke-pharma-receives-complete-response-letter-andJune 2019, Type A requested and held -
https://evokepharmainc.gcs-web.com/news-releases/news-release-details/evoke-pharma-requests-type-fda-meeting-plan-resubmissionAugust 2019, Minutes received -
https://www.globenewswire.com/news-release/2019/08/08/1898997/0/en/evoke-pharma-to-resubmit-gimoti-nda-based-on-fda-meeting-minutes-and-announces-second-quarter-2019-financial-results.htmlJanuary 2020, resubmission accepted, action date June 2020 -
https://www.biospace.com/article/releases/fda-accepts-evoke-pharma-s-nda-resubmission-for-gimoti-pdufa-target-goal-date-is-june-19-2020/June 2020, approval -
https://www.globenewswire.com/news-release/2020/06/19/2050830/0/en/FDA-Approves-Evoke-s-GIMOTI.htmlThat's more than a year!!! I know Mesoblast's case is slightly different, but GVHD will not sink the shorters, they just have to play around the covid results and hope that if Mesoblast applies for accelerated approval for GVHD that there's plenty of warning beforehand.
We should see them all pile out of their positions when the covid trial dates hit (depending on what they think the chance is of overwhelming efficacy, vs a full trial positive result vs full trial negative result).
(20min delay)