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KIT digital, Inc. Message Board

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  • johnmr12 johnmr12 Apr 2, 2012 11:31 AM Flag

    Shorts need shares to cover, BUT...

    Let me see if I understand. Analysts are calling for a $20+ share price and buyout, and the shorts are shorting more in order to keep the price down? What happens when the buyout comes and they are even more short than they were BEFORE a buyout rumor started? Thats complete nonsense. What you have here is a lot of selling everytime the price goes up. Most of the time it is retail investors who are listening to people like Roth Capital and buying at such a "discount". Meanwhile, Roth Capital is using the spike to get their preferred clients out of a stock that they know is heading south. Which argument sounds more logical?

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    • Buyer is the SHORTER ! They need the price under 10USD to buy the company under 15USD. But his short position is now critical, 80% of float is shorted he is playing with the fire.

      • 2 Replies to jumatech_inc
      • Normally I dont py attention to your posts because they really don't make much sense. However, you actually have a valid point this time. If someone with deep pockets plans on buying the company, in theory, they could short the entire float and then make an offer for twice the market price. If the company accepts, they will own all the shares so they dont have to worry about covering. The get the company at a discount taht way. The risk is if they run out of available shares to short, the stock price will go up in a hurry since most shareholders will not be selling down here. Any demand at all for shares will shoot it straight up. Actually, even if the "buyer" isn't shorting, whoever is shorting must be counting on the company needing to issue more stock to keep the doors open. More stock equals more available shares to short into a diluted stock price. The bottom line, if the company is actually able to achieve their revenue and earnings guidance the rest of the year without having to sell stock, the price will be in the stratosphere by the end of the year.

      • 2 millions shares and uuup !