Maybe I've left too much out. I'm talking macro. Here are my assumptions: 1. Most of the shorts do not understand their bargaining position very clearly. 2. But they think that's an advantage. They can sit on their hands, ignore their liability because it's denominated in shares, and let the stock tank.
Now here's how I read what's starting to happen out there: Buyers want a low share price. So do shorts. Ok, buyers say, let's play chicken. You want to cover at $0.01? Why should I waste money trying to stop you?
HYPOTHETICALLY, what happens if all buyers -- shorts and longs -- let the share price fall to $0.01? The volume gets pretty light down there, and somebody, somewhere starts to wonder whether these guys really CAN smoke out 10,000,000 shares at that price. Is it really a public company at all at that point, or has somebody taken it mostly private?
What then? What happens when the chicken hits the train? How do you cover 1/3 of a company that's mostly privately held? What kind of bargaining position are the shorts in now?
Some very tense emails go out from brokers to clients. Then tense phone calls. Then people start to grasp that we own shares in their houses.
What I'm saying is, I'm gonna stop BUYING shares until it hits $7. If a bunch of suicidal young shorts don't think they ever have to cover at all, then what good are we old value guys doing by fighting for shares at $12? I'd just as soon use the same cash for more shares.
I don't see anything in the next four weeks to make me think that the price will stop going down. So why pay more?