Pete, an announcement of a deal is going to take c
Post# of 72447
(Total Views: 180)
Posted On: 01/19/2018 5:45:56 PM
Pete, an announcement of a deal is going to take control out of the hands of the shorts and market makers. Any deal with a big pharma is going to make people want to pile in to the stock, especially if there are big up-front payments.
What if we got a deal for a modest 100 million? That's more than 50 cents a share. As Alan has suggested in the past, what would happen if the company declared a special dividend of half of it -- say 25 cents a share? A ton of people would buy the stock to get the dividend. This would cause a massive short squeeze and propel the stock hugely higher.
My own opinion, based solely on the way the stock has traded and the frantic bashing of the old identities that have reappeared on lieHUB after a dormant period, is that there IS some naked shorting in this stock. But, anyone who is short this stock -- legally or not -- is going to panic when good results and/or a partnership deal is announced.
Remember that there were about 1.2 Million shares legally short at the last report. On the 10-day's average volume of about 200k/day, that's 6 days to cover. Looking at today's low volume, it would take even longer.
Just think about this: if some legal shorts want to buy 1.2 million shares of stock, and none of us genuine shareholders are willing to sell at these low prices, exactly how high will the price have to get before people are willing to sell some? My bet is that there is no significant supply until around 2, when some may decide to sell some. But there are LOTS more shares that were bought from higher levels, and I doubt that people are going to want to sell at a loss when they see the light at the end of the tunnel.
Remember that DNDN closed one day at 7, and opened the next day at 21 on news of FDA approval. Biotechs gapping up hugely are not uncommon on great news.
What if we got a deal for a modest 100 million? That's more than 50 cents a share. As Alan has suggested in the past, what would happen if the company declared a special dividend of half of it -- say 25 cents a share? A ton of people would buy the stock to get the dividend. This would cause a massive short squeeze and propel the stock hugely higher.
My own opinion, based solely on the way the stock has traded and the frantic bashing of the old identities that have reappeared on lieHUB after a dormant period, is that there IS some naked shorting in this stock. But, anyone who is short this stock -- legally or not -- is going to panic when good results and/or a partnership deal is announced.
Remember that there were about 1.2 Million shares legally short at the last report. On the 10-day's average volume of about 200k/day, that's 6 days to cover. Looking at today's low volume, it would take even longer.
Just think about this: if some legal shorts want to buy 1.2 million shares of stock, and none of us genuine shareholders are willing to sell at these low prices, exactly how high will the price have to get before people are willing to sell some? My bet is that there is no significant supply until around 2, when some may decide to sell some. But there are LOTS more shares that were bought from higher levels, and I doubt that people are going to want to sell at a loss when they see the light at the end of the tunnel.
Remember that DNDN closed one day at 7, and opened the next day at 21 on news of FDA approval. Biotechs gapping up hugely are not uncommon on great news.
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