Shorters apparently lost $43bn on Tesla when it was going up....

First 30 Last

Share
Profile

Follow
max21

434 Posts.

58

23/07/23

07:57

Post #: 68929593
Share

Originally posted by WhatsTheTip: ↑

IMO the better question to ask is where the money from the short sell has gone?

If you buy shares it consumes cash (but you own shares). If you short shares, it generates cash but you have the loaned shares.

Option 1 - Put the cash in the bank and hope CXO's share price falls
This is a super risky strategy IMO because its exposed to the risk Core does something well. Its also exposed to the risk that lithium shares generally do well. Not even GS can guarantee that the whole Lithium market won't increase (despite their reports).

Option 2 - Put the cash into a generic basket of sharesThis is basically a bet that Core will do worse than the general market. Its still exposed the risk that lithium shares do better than the general market and its exposed to the risk that Core announces something special. If the broad market lifts and lithium shares lift the same amount you are still ok as a shorter. Your risk is limited to a knock-out announcement by Core. Its possible this is what shorters have done.

Option 3 - Put the cash into other lithium companies you expect to do better
IMO this is the most likely candidate. You take a pair of companies which are looking to get into development. One with a smaller resource, one with a bigger resource. With the opinion that a bigger market cap differential should exist than does exist, you short the small resource and buy the big resource. If this is the case, the money from shorting CXO is sitting somewhere like PLS, AVZ, LTR or AKE (and of these I'd guess AVZ/LTR as more comparable pre-production companies - at least when the shorts were established). If CXO goes up 20% or 30% but so does LTR there is no short squeeze because there is no pain. What causes the shorter a problem is if the invested leg doesn't increase while CXO does. If the money was in LTR then they would be laughing because of the rejected takeover offer. While on a huge profit (from the reinvestment into LTR), shorts are most likely seeing how the takeover situation unfolds because a takeover of LTR would resolve their issue of gaining cash to rebuy CXO. Over the last year PLS and AKE have done well so any short CXO/long PLS or AKE position would also have done well.

If some of the shorts have gone into AVZ the situation is more interesting. They can't close easily even if they wanted to.

If the cash from a CXO short has gone into a big resource company, the triggers for closing the short would be CXO resource upgrades or broker upgrades indicating that the market might more highly value CXO.

Expand

Shorters apparently lost $43bn on Tesla when it was going up. That’s what can happen. At least if you own a share you know what you may lose.

CXO Price at posting: 87.0¢ Sentiment: Buy Disclosure: Held
1 Upvote

0 Great analysis

Reply

Top Stories

GMD

Genesis set for higher gold production in FY25 and earlier mill start

EMD

Emyria jumps 10% on 'interim' success treating PTSD patients with MDMA

BAS

Bass completes successful testing work at Kiwi-1, showing higher-than-expected condensate yields

RDN

Raiden Resources jumps 11% as Andover South drilling to kick off with PoW on Minister's desk

TAT

Tartana Minerals firms up producer status with recent 150tn shipment of copper sulphate to the NT

There are more pages in this discussion • 241 more messages in this thread...

First 30 Last

Add CXO (ASX) to my watchlist

(20min delay)
Last 9.2¢		Change -0.002(2.13%)		Mkt cap ! $196.5M

Open	High	Low	Value	Volume
9.5¢	9.6¢	9.2¢	$721.2K	7.713M

Buyers (Bids)

No.	Vol.	Price($)
34	2019728	9.2¢

Sellers (Offers)

Price($)	Vol.	No.
9.3¢	740104	38

View Market Depth

No.	Vol.	Price($)
30	1915228	0.092
50	3139410	0.091
85	6600384	0.090
8	271550	0.089
7	406136	0.088

Price($)	Vol.	No.
0.093	740104	38
0.094	571615	8
0.095	689979	6
0.096	455460	7
0.097	354883	6

Last trade - 14.53pm 02/09/2024 (20 minute delay)

CXO (ASX) Chart

Shorters apparently lost $43bn on Tesla when it was going up....

Genesis set for higher gold production in FY25 and earlier mill start

Emyria jumps 10% on 'interim' success treating PTSD patients with MDMA

Bass completes successful testing work at Kiwi-1, showing higher-than-expected condensate yields

Raiden Resources jumps 11% as Andover South drilling to kick off with PoW on Minister's desk

Tartana Minerals firms up producer status with recent 150tn shipment of copper sulphate to the NT

Featured News

Buyers (Bids)

Sellers (Offers)

Featured News

Shorters apparently lost $43bn on Tesla when it was going up....

Top Stories

Genesis set for higher gold production in FY25 and earlier mill start

Emyria jumps 10% on 'interim' success treating PTSD patients with MDMA

Bass completes successful testing work at Kiwi-1, showing higher-than-expected condensate yields

Raiden Resources jumps 11% as Andover South drilling to kick off with PoW on Minister's desk

Tartana Minerals firms up producer status with recent 150tn shipment of copper sulphate to the NT

Featured News

Buyers (Bids)

Sellers (Offers)

Featured News