It looks to me like the shorters are starting to cover, and why wouldn't they if they're making a killer profit at this price level? They don't need to be aggressively buying as they expect the index funds will be looking to sell in due course.
Some have suggested that the covering needs to be done and the short position closed before the funds can sell. I'm not so sure about that, it seems a bit archaic in this digital age to me.
My understanding is that a broker only settles net net the amount of stock traded externally (IE. if a broker sells 200,000 units and buys 100,000 on behalf of all their clients, they only deliver 100,000 to CHESS for settlement. The other 100,000 is appropriated in house so to speak.).
Therefore, in theory it should be possible for a shorter to buy, a fund to sell, and the short position to be closed all at the same time. A bit like a journal entry by an accountant. But, the technicalities of the rules and regulations, IF they are adhered to, may say otherwise.
In my opinion, there is now only 2 ways those short would need to buy back aggressively. 1. An announcement prior to the end of March that rerates the market valuation of the stock 2. If Coby and Dadi meet with the funds lending the stock when they are here in March to convince those funds that they would be crazy to sell the stock.
If you take the Vanguard ETF VAS for example, it currently has an allocation to WBT of 0.0272%. With a fund size of roughly $34B, that equates to a holding of $9.25m. A big number, but not in light of the overall size of the fund. Currently the fund has 308 individual holdings, even though the index it tracks (ASX300) only has 300 names. This shows that the index does not track the index 100% at all times.
My point is, the index funds do not have to sell WBT on or by 31 March. Yes, they need to replicate the index by 98 or 99%, but he last 1 or 2% needs to be managed in the best interests of investors in light of in's and out's of the index, optimising tax and transaction costs, not wasting opportunities, etc, etc.
If Coby and Dadi were able to meet with them and instill a confidence to hold the stock, it would make those short much more nervous in light of the commentary management have provided of the current operational environment and opportunity, I would think.
Still very interesting as to how it all plays out. Fingers crossed!
WBT Price at posting:
$4.37 Sentiment: Buy Disclosure: Held
(20min delay)