Short position at 20/08/15 increased by over 7 million shares compared to 04/08/15. Future buying demand for the shares has therefore increased by 7 million shares to 127 million shares above and beyond normal market demand as at some point they will need to close their trade and return the stock.
At these price levels a share buyback would be a potential contender for capital allocation. Below book value, assuming the assets are solid (which they appear to be, generating solid cash flow) a share buyback is effectively giving shareholders an immediate 25% return on investment.
MYR Price at posting:
$1.20 Sentiment: Buy Disclosure: Held
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