Comments on the scare tactics of the short sellers – that there will be a mass dumping of Ampio shares in early 2012. The first issue, management lockups expiring, has already been disproven. Senior management owns over 12,000,000 shares and they have voluntary extended the lock up until July 2012; that is a sign of strong confidence by management! While there is a provision that each of them can sell only about 8% of their shares, do you really think they’re going to “dump” at depressed prices and help the short sellers? Further, insiders with large holdings routinely set up regular amounts of program selling (or buying).
The second issue regarding dumping is institutions. Institutional buyers do their homework; they will not be panicked into selling because of an amateur short attack. One specific institutional issue involves Genesis Capital, who the short sellers say, will dump their shares in January. However, Genesis Capital states their plan is that “shares of Ampio Pharmaceuticals Inc are prudently sold in the market (in) early 2012.” “Prudently” doesn’t mean dumping – they’re smart enough to know better than to sell during an amateur attack by shorts. Further, they have a fiduciary responsibility to their investors to maximize value.
The implication of all this is that not much public float is readily available. If the shorts are counting on 1-2 million shares to be “dumped” in early 2012 and they don’t materialize, what will they do? Run! The battle must also be fought by the retail investors. The objective must be to hold positions and reduce the supply of shares available to short sellers. Reducing the supply will cause price to hold steady or increase. A price spike will result in margin calls to the shorts, who may be forced to cover to reduce their exposure.
There are at least two things retail investors can do to fight back:
Call your broker to instruct them that they may not allow anyone to borrow your Ampio shares. If you allow your shares to be borrowed, you are providing fuel to the shorts who need those shares to sell short. Why would you allow them to work against you with your own shares? In addition, the more scarce shares are the greater premium the shorts must pay to borrow them. Do not sell your Ampio stock. While us “little retail guys” may not think we can make much of a difference, together we can make a substantial impact. For example, a friend and I each hold about 17,000 shares. If just 20 shareholders like us hold their stock that’s 340,000 shares – or over three days average volume! Just 100 to 150 of us may have enough shares to cover the entire 1.7 million shares short as of last week. The shorts’ tactic has been to wait toward the end of the day when volume is light, to try to drive price down and discourage investors. Don't fall for it.
A related bogeyman tactic by Mr. Gefvert has been to ask “why isn’t management buying shares during this attack, if they are so confident in their plan”. But Mr. Gefvert certainly knows that management is prohibited from buying during periods before an earnings release – so this is just another scare tactic.
Full Disclosure: I’m long AMPE and intend to initiate additional positions at these prices.
"While there is a provision that each of them can sell only about 8% of their shares, do you really think they’re going to “dump” at depressed prices and help the short sellers?"
With all due respect, management doesn't give two craps about short sellers or yourself for that matter.
It's called money. Lets say you held a few million shares, you had a payday coming. What would you do? I know what I would do. I would sell some shares. Depending on what I knew, I might sell all or some.
But the last thing on their minds is short sellers or shareholders. This America, where greed, stealing and "getting yours" is the corporate motto.
So don't fool yourself and tell yourself reassuring niceties about where PPS is going when the lockout ends, cause sell the will. Question is how much gets unloaded.
It indeed is about money. Management along with the employees and insiders are interested in making it. How can they maximize their gains?
There is only one way - The tests like that on Ampion currently being finished in Adelaide Australia need to show positive results. If that happens then Ampio is worth big bucks. Pharma will ine up outside their door to either partner or license the drug.
The burn rate of cash will drop to about $250K per month starting in January when the Ampion test is complete. Zertane will provide some cash from sale OUTSIDE the US. And depending on the Ampion results those of us holding shares will either make or lose $$ along with the major holders of Ampio.
Oh yes, for the bashers. I placed a call to M. Macaluso yesterday and was told he would return my call. I indeed received a return call within the hour and we spoke about Ampio for about 20 minutes. He answered my questions (as well as he could so as to not violated rule FD) and was open and I feel honest.
IMO, Ampio is about to enter its next phase as a drup company instead of an exploratory company with licensing arrangements or it will be bought out. My second thought is that it is sad we have made it so difficult to do these tests in the US and companies are forced to go elsewhere.
This year has been rough on my capital account but AMPE made my year sucessful back when it hit $9. I didn't think I would get the chance to buy it again at these prices but it certainly appears I will be able to repeat the ride up in the next few months or sooner. I think we will soon see the end of the short attack and a steady flow of progress. Good luck to everyone!