capacity is currently running high. what's material is that they will need to complete a secondary in the near term given the cash situation. the previous equity raise per lawsuit settlement. AR's increasing, but AR to cash crossover is stalling. eventually GAAP losses will catch up. neg RE's increasing
bulls are hopeful for refinancing though principal hasn't been paid off, bouncing at the MA50 and mfi is low, but bears are looking at actual gaap #s. you can't fool hedge funds with nongaap reporting. interest coverage ratios are acceptable. oaktree's $10 warrants represent a 150% return over 1.5 years. if revenue slides more, DMND'll take another hit on the hefty interest expense which may mean more dilution.
I would not short at this point though, too much irrational exuberance. just hold
I revise my position the secondary buyers will be arbitrage firms. though, an executed strategy would likely net them post-tax 6% for less than a week of almost risk free trading provided shares aren't locked. annualized, 20.6% ROI compared to the risk free rate and you can conclude that that's some serious alpha generated. $3 and $3.30, secondary and 200d MA are interesting anchor prices though R2 weekly is $3.96
don't trade with etrade, they don't recognize calendar spreads (margins)
raise money when you don't need it. the secondary made sense
margin calls for the highly leveraged, $20 MM arbitrage opportunity. I'm surprised only the Nov 3 puts have activity. What surprises me is that those who are buying and holding aren't writing the Dec 4 puts with premium
MFI is low...short% 20%+ squeeze isn't going to end yet