After the oil glut, supply will become insufficient for the demand and more drilling will begin and RES stock price will climb (if RES is still around). All those who shorted will begin to take long positions. If you hold really long through both cycles it won't matter much: you are in for the long haul collecting dividends, accumulating shares as it splits, perhaps even adding to your position on the dips down; you don't worry about it unless oilfield services are in a bust cycle and you need to sell fast for whatever reason, or you are one of these traders with your sphincter clenching on every dip in share price.
Forward EPS Long Term Growth (3 to 5 years) is expected to be 23% so if you are long-long, that is, more than just 1 year, next year's expected 4% dip won't bother you much. Being long doesn't mean you have to stop doing due diligence (management could become senile or something), it just means you don't have to worry about short term cyclical things.
The shorts are betting on a probable future event, like in Blackjack when you've counted the cards played and you know odds are better but of course never certain. The odds are pretty good RES is going to decline incrementally so that by December
"The 28 percenters" get a big stocking full of goodies from Santy Claus.
The cash flow problem is a big red flag. You need to pay attention to it. I see gray clouds on the horizon, 72% chance of rain and no parade. Someone here mentioned a parade which I thought was a good image for a stock going high. I liked that. Good imagery.
If RES is having free cash flow problems when oil price is high and business is booming, what do you think is going to happen when wells shut down due to over-supply and business fizzles?