Why is PLS so short sold?, page-34

Why is it short sold? Maybe because it is an easy target?

The share price is very volatile and until the production phase settles, until the long term market gets some stability and until profit starts being generated volatility will continue. Given that volatility, and the excitment over Li into the future, it is a great temptation for people to over buy in the short term and so a great temptation for others to short.

Many people are expecting dramatic price rises in the company and see excitement about its future. Some people are tempted by what they suspect will be big and quick returns and dive in thinking they will be quickly rich - they over buy what the market will bear at this point (given we are still not generating income yet).

Shorters see this and see an easy target. When people retract from the excitement, shorters clean up. It is a battle between those who are impatient for a profit and those who know there are people who are impatient and over excited and think they are heading for a quick win. Shorters are not necessarily doubting the company's potential, they just see a way to make a quick buck because of some people's over excitement.



Long term holders should just shrug their shoulders, the shorting is just noise on the way to a long term payoff, if you are looking long term and believe it has legs you lose nothing because of shorting.

And if you really believe the company has legs and is being short sold, you buy when the price drops - you don't complain the price is too cheap!

However if you want a quick return on investment, you are playing in a shark pool, lots of sharp teeth here. It is a big wild market place full of horse traders and people are in it to make money - if you get excited and think you are going to make money for jam you might find you are the jam and will be eaten.

That is my perspective anyway.