Respert: My good friend, I agree and disagree with portions of your sage analysis of this Citadel/GSK situation.
I agree with your conclusion that the massive size of this short position($385 million), the largest short sale involving GSK since 2013, militates against this being simply a garden variety short position against a stock that got a nice bounce after better than expected quarterly earnings. There are dozens of stocks every month that would fit that protocol for shorting, So it would make little sense to establish such a massive short position on any one of them.
I disagree, however, with portions of the 2 options you posit regarding the assumption that Citadel thinks it knows something. Given the size of Citadel's bet, I do think it is highly likely that Citadel thinks that it knows or has deduced something regarding GSK's fortunes that the rest of the market isn't seeing. But, my guess is that this"something" is most likely one discrete occurrence or event that Citadel is betting on as opposed to a series of negative events over weeks or months. --- some seemingly cataclysmic event that will soon plunge the sp, virtually overnight, with accompanying heavy volume facilitating the easy unwinding of 10 million shares for huge gains. Moreover, if the event never occurs, Citadel would likely be banking that its huge short position can be gradually unwound over time without significant loss as GSK's sp routinely fluctuates.
If my premise of a singular event is correct, I don't think the potential monkey wrenches from Trump/Kennedy fit well as the basis for Citadel's short position. If they do happen, they would likely be implemented gradually, over several months, and would impact a significant portion of big pharma, not just GSK.
I agree, of course, with your option 2, that acquiring companies traditionally lose sp while the acquired company gains sp. But if Citadel is betting on a run of the mill GSK/biotech buy out, the GSK sp drop would likely be minimal to moderate. Whereas, a GSK/CYDY BO or major partnership investment would certainly have to generate dozens of multiples of CYDY's current sp to satisfy CYDY shareholders, a circumstance that would at least temporarily substantially drop GSK's sp.
My purpose in exploring all of the above is not to predict that a major GSK/CYDY transaction is imminent. I have no idea, and everything I have written is pure speculation based on Buddyboy calling the board's attention to this very curious massive short position in GSK taken by a major hedge fund. Nevertheless, while there are likely several singular events that could deep six GSK's sp overnight, the Citadel C-suite would be more than justified in opining that a major financial investment in CYDY would be one of them.
I recognize full well that CYDY's sp is a hugh obstacle to a major investment in LL, but the shareholders on this board, led by ohm, know full well the enormous revenue potential of this drug. Is it possible GSK knows too?
Best regards.
I agree with your conclusion that the massive size of this short position($385 million), the largest short sale involving GSK since 2013, militates against this being simply a garden variety short position against a stock that got a nice bounce after better than expected quarterly earnings. There are dozens of stocks every month that would fit that protocol for shorting, So it would make little sense to establish such a massive short position on any one of them.
I disagree, however, with portions of the 2 options you posit regarding the assumption that Citadel thinks it knows something. Given the size of Citadel's bet, I do think it is highly likely that Citadel thinks that it knows or has deduced something regarding GSK's fortunes that the rest of the market isn't seeing. But, my guess is that this"something" is most likely one discrete occurrence or event that Citadel is betting on as opposed to a series of negative events over weeks or months. --- some seemingly cataclysmic event that will soon plunge the sp, virtually overnight, with accompanying heavy volume facilitating the easy unwinding of 10 million shares for huge gains. Moreover, if the event never occurs, Citadel would likely be banking that its huge short position can be gradually unwound over time without significant loss as GSK's sp routinely fluctuates.
If my premise of a singular event is correct, I don't think the potential monkey wrenches from Trump/Kennedy fit well as the basis for Citadel's short position. If they do happen, they would likely be implemented gradually, over several months, and would impact a significant portion of big pharma, not just GSK.
I agree, of course, with your option 2, that acquiring companies traditionally lose sp while the acquired company gains sp. But if Citadel is betting on a run of the mill GSK/biotech buy out, the GSK sp drop would likely be minimal to moderate. Whereas, a GSK/CYDY BO or major partnership investment would certainly have to generate dozens of multiples of CYDY's current sp to satisfy CYDY shareholders, a circumstance that would at least temporarily substantially drop GSK's sp.
My purpose in exploring all of the above is not to predict that a major GSK/CYDY transaction is imminent. I have no idea, and everything I have written is pure speculation based on Buddyboy calling the board's attention to this very curious massive short position in GSK taken by a major hedge fund. Nevertheless, while there are likely several singular events that could deep six GSK's sp overnight, the Citadel C-suite would be more than justified in opining that a major financial investment in CYDY would be one of them.
I recognize full well that CYDY's sp is a hugh obstacle to a major investment in LL, but the shareholders on this board, led by ohm, know full well the enormous revenue potential of this drug. Is it possible GSK knows too?
Best regards.
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