They got a deal with a major, anyone have any idea about why it sold back down?
I personally thought it was just some big $$$$ taking profits, then I saw all of the July put buying and I can't figure it out.
ok, ok OK!!!, They "entered into negotiations" with a major, that's what I meant in the first place. But, every short was claiming that they were a fraud and that there was no way a major would touch them. Obviously the shorts were wrong, so why the sell off? The fact that they are negotiating with a major is worth 10+ points to the upside. Therefore, I'm still unclear as to my original question, Why the sell off?
Maybe you should frame the question differently.
Why the run up to 108? It was not justified. Once the press release was digested and understood not to mean eminent, the stock came back to earth.
Now I think momentum has pushed us too far the other way. We will see if this corrects this afternoon. This is not a good tape day for the market which doesn't help either.
Just my opinion.
InterOil and Pacific LNG will be funded to drill additional delineation wells in the Elk and Antelope fields, which will be followed by recertification of the resource.
I believe the above line from the press release is one of the drivers of the sell-off. The need to recertify plus the fact that XOM is only signing up for one train calls into the question the size of the field.
Further, a deal to sell gas to the XOM / OSh facility, while generating cash flow more quickly with less capital, is not as profitable as owning the entire production cycle all the way to LNG.
M A N I P U L A T I O N
BUT WHO IS DOING THE MANIPULATING??
If I wanted to get long, or add to my long position just before IOC took off, I'd be elated to get in at these prices, while the stupid money panics and sells.
Sentiment: Strong Buy
Shorts are firmly in control of this tape. This is why I have repeatedly advocated selling the entire company for any offer over $120. Shorts can naked short a million shares intraday if they need to. I suspect the same action even after SD, FID, etc. This is and always has been a covered call play or a buyout play. The company needs to realize this situation they are in and sell the company soon. Shorts will never allow an independent IOC to be fully valued for their resources.
You are right about the naked shorting part. Years ago the SEC gave a wink and nod signal that they had no intention of ever enforcing their own rules against naked shorting. One SEC lady even called the practice "healthy." That helped the shorts to bring down Lehman Brothers in Sept 2008. They shorted billions of shares that they never borrowed. Because Lehman went belly up they never had to cover. How it works with a healthy company I really don't know, but somehow the shorts can short naked shares without ever having to cover. That is the great Wall Street mystery. Covering only applies to shares that have been borrowed. Longs need to understand and live with this reality.
Simple explanation. IOC telegraphed a deal with a major for months, and the stock ran from the mid $60's to over $100 on that news. Now that the deal is announced, the street sells the news. In retrospect, if they had said absolutely nothing for months, and no one knew what they were doing, the stock would still be in the $60's, but today's announcement would create a huge short squeeze over $100, as it would surprise the market.
The shorts knew the deal was in place, and that way they were able to gradually cover on any dips in an orderly fashion. Sellers over $100 was expected, buyers over $100, not so much.
If a deal was actually announced, the stock would be up substantially.
What was announced was "exclusive negotiations." That is very positive but is not the shot heard round the world.
We wait, but with more clarity and confidence that a deal will be reached with a super.
I still say June/July.
There is no deal yet. There are now exclusive negotiations with Exxon and they were not far along enough in the process to warrant a press release.
The press release was only issued in response to the leak from PNG.
This is good news but it is not deal news. Once the market figured it out, it reacted in kind.
Just my opinion.
"Once the market figured it out, it reacted in kind" I agreed with you up until the point of this quote. since the deal is surely coming soon, the selloff is still surpassing.
What I do not understand is the exclusive part of this. There is surely much more gas in E/A to justify other deals beyond 1 train. Why does this preclude other deals. That was not the way I read the announcement. We surely need more clarity from IOC, I believe. Hopefully the non-disclosure has been blown and we can get some color on how much leeway they have to work with others.
The only thing I can figure is that they have a plan to trickle their covering over time without spiking the pps and save gobs of money that way. But you would think that big new buyers would be able to foil their plan. But these shorts are very smart and obviously have very effective methods at their disposal to drive the price back down. It is a mystery to anyone who has not worked in a big hedge fund. Do we have any former hedgies that can explaijn this?