What really blows my mind and I have absolutely zero comprenhension or logical explanation for is WHY ON EARTH there are people who still short this stock, I mean from a practical standpoint alone.
Here is my line of thinking and maybe somebody can find the flaw in my line of thought or answer my question:
Assume someone sells 100k GNBT shorts into the market on Tuesday (Monday is a public holiday in the US, right?) and even if he/she is successful with it, the pps falls, some other people panic and the PPS dives back down in the lower 50ies. Under these very optimistic (from a shorter's perspecitive) circumstances and with 100k shares short, one would merely be able to make 10k USD.
On the other hand, if one would invest 10k USD in GNBT shares, it is no rocket science to calculate that one is fairly easily able to make a 10fold higher profit (even with the following extremely conservative assumptions).
So, assume one has invested ~10k and bought 15k shares. Now in a week, he/she would receive the dividend and afterwards has 21k GNBT shares AND 6k NGIO shares. Once NGIO gets listed on Nasdaq their shares would at least have a value of $2/share and thus the 6k dividend shares would have a value of $12k, so a 20% return on investment right there already and have all the GNBT shares FOR FREE on top.
Once the value of NGIO is uncovered due to the IPO, GNBT would hold a value in their hands (75% of say 400M NGIO market cap) that is ~10fold higher than GNBT's current market cap and thus a 10fold MC would be justified (even leaving all the other subs out of consideration!), which leads to a PPS in the > $6/share range. Which would turn the 21k GNBT FREE shares into a $126k value. In sum this represents a possible profit of ($126k + $12k
($138k /10k - 1) * 100% = 1280% and even if we would take only 50% of that, it would mean a profit of 60+k USD, compared to the possible gain with the short position, while the short position - in my view - currently bares a signifiantly higher risk of ending up in a (significant) loss. May the be SQUUUEEEEEEEZZZZZZEEEEEDDDD and burn in hell!
The guys, who still short this company, are most likely professionals and if I am able to make such a calculation, they should even more so be able to do the same and they are doing this for a living. So WHY ON EARTH is this company still shorted, while there is so much more profit potential on the other side of the medal? Can somebody find the flaw in my thinking or give me a reasonable answer to this question?
Here is my line of thinking and maybe somebody can find the flaw in my line of thought or answer my question:
Assume someone sells 100k GNBT shorts into the market on Tuesday (Monday is a public holiday in the US, right?) and even if he/she is successful with it, the pps falls, some other people panic and the PPS dives back down in the lower 50ies. Under these very optimistic (from a shorter's perspecitive) circumstances and with 100k shares short, one would merely be able to make 10k USD.
On the other hand, if one would invest 10k USD in GNBT shares, it is no rocket science to calculate that one is fairly easily able to make a 10fold higher profit (even with the following extremely conservative assumptions).
So, assume one has invested ~10k and bought 15k shares. Now in a week, he/she would receive the dividend and afterwards has 21k GNBT shares AND 6k NGIO shares. Once NGIO gets listed on Nasdaq their shares would at least have a value of $2/share and thus the 6k dividend shares would have a value of $12k, so a 20% return on investment right there already and have all the GNBT shares FOR FREE on top.
Once the value of NGIO is uncovered due to the IPO, GNBT would hold a value in their hands (75% of say 400M NGIO market cap) that is ~10fold higher than GNBT's current market cap and thus a 10fold MC would be justified (even leaving all the other subs out of consideration!), which leads to a PPS in the > $6/share range. Which would turn the 21k GNBT FREE shares into a $126k value. In sum this represents a possible profit of ($126k + $12k
($138k /10k - 1) * 100% = 1280% and even if we would take only 50% of that, it would mean a profit of 60+k USD, compared to the possible gain with the short position, while the short position - in my view - currently bares a signifiantly higher risk of ending up in a (significant) loss. May the be SQUUUEEEEEEEZZZZZZEEEEEDDDD and burn in hell! The guys, who still short this company, are most likely professionals and if I am able to make such a calculation, they should even more so be able to do the same and they are doing this for a living. So WHY ON EARTH is this company still shorted, while there is so much more profit potential on the other side of the medal? Can somebody find the flaw in my thinking or give me a reasonable answer to this question?
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