Funny how we see these clowns appear when we are under short...

Funny how we see these clowns appear when we are under short attacks.

The shorts data released today reconfirmed my suspicions - the share price drop has nothing to do with company fundamentals or insiders selling. The big boys who hold most of CXO remain holders and committed to the company. They haven’t sold a cent.




The drop is purely a short play where around $150m worth of shorts piled in over a matter of weeks. Any company’s share price would find it hard to absorb all of that selling. It is impressive that we remain above the June/July price (of 83c) despite being more shorted (the graph is delayed by 4 days, so short percentage almost certainly exceeded July levels by now) - it shows real progression and strength in the buyers absorbing the attacks.

Similar attacks over at our big brother PLS, despite them scheduled to rake in $1b this quarter. Just think about it - a company who is guaranteed to make $1b in profit in this quarter, and operating on a PE ratio of 3-4 is being shorted to a tune of $650m. Think about that. More than half a billion dollars shorting a company already making $1b a quarter. Some people have clearly gone mad.

These shorts clearly have latched on to a macro/China narrative and decided to go all out and attack. What I’ve learnt over the years about China is it is an incredibly flexible machine that will do what it takes to get back in the game. I foresee the EV subsidies almost certainly being extended, and more stimulus injected in, once the current Covid wave passes. China will almost certainly do what it takes to get back on track, no ifs ands or buts.

Then the shorts will start covering. One can only imagine what would happen when (at least) $150m of shorts are unwound.