Without arguing about valuation why I think it stays above 4 ( and I sure hope 4.50 )
I dont THINK big holders can let it hit 4. I am sure they cant let it hit 3 and I am positive it cant hit 2.. But I am sure you can show me why I am wrong... Heck, tomorrow or soon I could be PROVEN wrong -- but heres how I see it:
1. There are plenty of BUYERS out there among big and medium oil that need more Nat Gas exposure. They make a call to their credit facility and decide how much premium they are willing to pay above stock price to take it. this has already been a buy out target Occidental, some others have already eyeballed this thing at way higher prices...
2. The current big players hold so much of the float that they would have to start unloading, as opposed to BUYING to make stock go down too much more at least on volume.... So to avg down that has to happen.
3. The curent holders are kind of activest holders with a plan and yes they are probably avg down as they can or will, but if they do not shore up price at some point then NEW hedge funds or holders can come in at lower share price and control a bigger block of shares. The current holders cannot let that happen or they in essence are LOCKING in their losses. eg. NEW hedge come in and buys 50 million shares at lower than 4 then THEY can unload or make deal at 5 or 6 leaving the current holders with higher averages as bag holders...
4. The positions are so large in some of the funds that this isnt part of a hedge on their part which is part of a synthetic position ( long or short index and opposite specific stock) and coupeled with the fact that I believe most large positions in hedge funds are not acquired without a great deal of data and valuation processing and modeling.
5.Is there anyone who would START a naked or similar short position here? if so let me know.
Anyway just my opinion, I hope I am right. Hoping for a green close tomorrow