You may well be right, but considering 11% of the free float is...

You may well be right, but considering 11% of the free float is already short, the business is growing quickly, the business is diversifying away from VIC etc quickly, there will likely be more accretive acquisitions this year (the $74m raising is for 3 potential acquisitions, likely in the next 3-6 months) and the is on a PE of 16x (which is cum upgrade - assuming no regulatory change), then who knows what the price will be prior to the major selloff from a big regulatory change.

And if the regulatory chance has not happened in say 3 - 6 months then things could be looking a bit nasty for the shorters.

All my point is, is that the potential cost of playing a short trade on the regulatory risk around VET could be quite high. The first 9m shares (c.7% of the freefloat) shorted were done in Dec 13 when the stock was around $2. So clearly they are way offside and hoping beyond hope that the major regulatory change happens asap.

I think it is definitely conceivable that if VET does do some acquisitions over the next few months, continues to see some small PE re-rating and continues to execute strongly, it could easily be trading at $4+.

Then maybe you get your regulatory event which primarily impacts VIC revenue. VIC revenue was c.80% in FY2014, is expected to be 40% in FY2015, then 10-15% in FY2016 (assuming management do what they say they will). So, what will the share price hit be from a major regulatory change? 20%? 40%? Who knows, but I would think the poor shorter at $2 may well still be underwater.

Then of course what happens if a major regulatory change doesn't occur?