Short Interest up to 8.5mm shares as of 2/14/14 (+53k shares). I am really hoping they did some serious covering on the day with +3mm shares traded. If that was buying and not covering, then I don't see this short trade ending in anything other than pure distruction.
There is an unspoken 3rd catalyst out there that will be announced in the 10-k and that is cash on had as of 12/31/13. If SGYP shows that they have enough cash to finish 2014 and then some, then the thesis of pending dilution will be out the window too.
I can't imagine doubling down on the short position with enough cash and two positive phase II trial results......
Frank, you hit every key point in my book. It's simply exactly how I feel, right down to the 3.5 million share day. I too can't imagine them doubling down, although some thoughtful people here disagree. I also would love to know when they need cash by. Don't think we make it the year, but don't want to be negative. Just another reason I hate the shorts, they killed our over allotment! They dropped us so fast and hard after the secondary that they made it stupid to pick up the over allotment. Left us 30 million short of comfortable.
You are right. And that is an excellent point re: cash on hand!
As for the large short position, I think the problem is - we are approaching this with sound mind, the past has proved to me time and time again that these people have a sickness and will dig the hole deeper and deeper rather than capitulating. They HAVE to believe there is a way to come out ahead. They MUST believe this.
Now listen, people short all the time and do very well. Those that do, never hold very long at all though; Not like this! As to covering, yes, Im pretty sure there was some covering that day.
Shorts, by nature, can withstand a lot of pain...it is just part of the game. Net short volume is still increasing, but certainly slowing. I for one want to see the short balance as high as possible going into positive data release. As long as we can stay above $5.50, I believe we are great shape technically. I think that we will see a push above $6.50 going into data release with significant upside from there. In looking at open interest today in the derivatives, it looks like we are about +6500 call contracts vs. puts with a lot of open int in April (and I'm sure that some of the put balance that has been put on is short or bullish).