Why would anyone short a stock at 50 cents? AT most stock could go down 50 cents yet over night you could get burned without notice as 4 things are going against you.
1. It's an election year- manipulation will be to push stocks up. 2. Breaking news on the clinical study 3. Strategic partner purchase tngn 4. CFO already hinted at reverse split to get stock over a dollar.
Lets do the math. Let's say you have $100,000 to invest which given you're shorting a stock at 50 cents I dont' think any of you have the brains to save $100k.
AT 50 cents you short the stock so you just borrowed 200,000 shares to sell. If stock goes down 10 cents you earn $20,000.
But what if a clinical announcement is made and stock shoots up to $1.50? Now you need to replace 200,000 shares you borrowed by paying $1.50. This will cost you $300,000 so you're original $100,000 is now worth negative $200,000.
Your risk reward ratio is really bad. You can at most gain tens of thousands but you can lose hundreds of thousands, even millions.
The shorting the stock strategy should be played on big stocks with high volumes--you're going to lose your shirt on Tngn.
"But what if a clinical announcement is made" you mean like PR?? You will never have to worry about that these idiots don't know how to operate a publicly traded company. They haven't said anything since IPO what makes you think they will say something in the future???
obviously if company were well run stock wouldn't have dropped so much. Yet, I suspect prior to IPO management ran company by PR releases and now they are focused on real science, the clinical trials. This in ST had dropped the price but if trials go positively they'll be a nice pop up and many shorts will lose quite a bit. nothing against shorts, this is a speculative investment for me--if it goes to zero I lose a little but upside for this breakthrough technology could be huge. On the other hand I do not see the point in shorting a stock like TNGN--at most one can gain 50 cents a share but it is very unlikely that stock could go to zero. But a short could lose their shirt on sudden jumps. Nothing wrong with shorting, perse, but when I short I do it on large cap fairly predictable stocks.