FYI... I response to an inquiry re: "some of these shorters shorted for the usual reason.. they thought the SP was going down." I posted the following on the other board. Thought I should share here as well. Comments?

red911

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Clinteroo:

I agree "some of these shorters shorted for the usual reason.. they thought the SP was going down". Of course... but I do believe these shorters for 'the usual reason' were most likely in the minority this time around. Here's why...

Consider this... Trading during the period in question... 1 million additional shorts outstanding between Jan 31st and Feb 15th AND the price did not really even go down. The price went from 28 to 25 during the first 5 sessions on just 4.5 million shares, then traded at ~24-25 cents for 3 sessions on 2 million shares, and then actually increased to 27.5 cents on 3.3 million shares. Sure the opportunity to profit from shorts was there but it was awfully tight and if you can time you shorts that perfectly then great but IMO not many can or would even try.

Furthermore... given the tight trading pattern and relatively low volume during the period in question, shorters of SGX for 'the usual reason' would most likely have to be in and out relatively quickly, thus covering their shorts and not even showing up in this static short report as of Feb 15th. An awfully risky strategy otherwise don't you think? (Remember, the constant churning of shorts during the period that are convered are not captured by the short history report as of a static date).

PLUS... most importantly IMO... don't forget insiders were going long (i.e. buying on the public market) during this period. So shorters for 'the usual reason' believe the stock is going down but management believes the stock is going up?! Who are you gonna bet is right?

My point here and of previous post is that... Shorting does not ALWAYS occur because people believe stock is going down. I don't profess to know or everything or be able to explain everything. My posts are only intended to be basis for further discussion.

red911

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Clinteroo wrote:

Or just possibly some of these shorters shorted for the usual reason.. they thought the SP was going down.