Maybe some people knew the placement was coming, although it certainly wasn't a well flagged raising.
While there was a small spike in the short interest in August, likely at prices above the $3.05 placement price, it would appear most of the shorts were put on at levels lower or only slightly above the placement price.
Also, from what I have heard it was very difficult to get stock in the placement if you were not an existing holder. So it was unlikely many shorters could cover in the placement.
So, I really don't think people were shorting VET for this raising or made much money as a shorter because of the raising.
I guess we'll see over the next week if the short interest comes down as to whether the shorters have covered - my guess is there will not be a big decrease.
While I think shorting is hard generally, it is likely the better shorts are the ones which are expensive, fundamentals are deteriorating (analyst earnings downgrades), have broken down technically and ideally have dodgy management. For VET, it is still cheap, earnings are being upgraded and likely significantly upgraded from further accretive acquisitions, technically it looks very strong and management seem pretty good.
The hard thing for VET shorters is they are looking for a one off regulatory hit (funding cuts to education courses run by VET) that potentially sees an MMS style fall. It is very difficult/impossible to call the timing on this, if it does actually ever happen. Also, with the rate that VET is diversifying its business away from the areas that may be impacted from a regulatory change, even if a major change does happen it may only have a minimal impact on VET and the shorters could be very underwater.
In my view VET is a bad short at this point because you effectively have to continue to hold a stock that looks very attractive as a long, does not match the basic criteria at all that I mentioned above, all on the hope that a major regulatory change occurs (really in the next 6 months) before VET diversifies sufficiently away from the area that MAY see a regulatory change, all in the hope for a big one off payday.
I am not saying the stock won't go down, it easily could and no ones knows what is going to happen next, however personally I think the current upside probability is better than the downside probability.
We shall see.
VET Price at posting:
$3.20 Sentiment: Buy Disclosure: Held
