FDR short interest – good, bad, or background noise?As we await the imminent update of our company’s short position, my thinking on how to read it keeps evolving. I know large corporations can regularly attract lots of short-sellers. And not necessarily those with truly predatory intent. Up-to-date knowledge on that front can definitely make for good options plays.
But, as has already been remarked upon on the FDR bull boards, holders of escrowed shares can often short against their still-frozen long positions to lock in profits. The $0.40 placement holder from August may have already done this. If it was mainly him doing the shorting since then, we may get back to roughly zero in the next report.
On the other hand, some of the recent $0.80 PP buyers may also be in the process of taking their initial capital out of their FDR positions – especially during the recent new highs. Our $0.40 buyer could be quietly flattening his short sale with a ledger-entry at his broker’s back office while plenty of other people's stock is headed the other way on the open market. The net result being an unchanged or even increased short position.
We won’t know for sure from where any new shorting might be coming until another 3 months have passed. And that’s assuming no more financings are done during that time, muddying the waters.
Not that I would likely complain if we raised more capital. Remember, if a financing is genuinely not needed, that’s probably when the offers become the most numerous and sweet. Kind of how many banks are delighted to offer you cheap loans once it is clear you won’t be asking for any.
So how do we interpret the short report when it arrives? I guess any kind of reduction is very bullish in the short term, especially if we get back to nearly zero. But an increase, within the amount reasonably representative of approximately full capital extraction from institutional $0.80 PP buyers, is hardly bearish.
(I leave out November’s retail placement buyers, as I suspect most of them won’t bother to lock in profits or even extract initial capital. They are likely more aggressively bullish on FDR, and have more concentrated portfolios, than the typical institution.)
The well-worn adage “life is a journey, not a destination” or its stable-mate “enjoy the journey” may sound like the justifications of a failed career (or life). But I’ll offer a defence of them here. Regularly piecing together the status of the progress of our common venture as FDR longs, using each bit of new info as it becomes available, *is* highly enjoyable.
Yes, pure enjoyment and simple pleasure. No point in my trying to hide it. The more I write, the more I realize there is plenty of additional commentary I want to write.
And, assuming the indicators of Stockhouse’s platform metrics are accurate, judging by the speed of the uptake on my comments, regardless of the day or hour I post them, there must be at least a few dozen of my fellow FDR shareholders who heartily agree.
I never knew how much fun it would be to play-act at a role so similar to a pre-game sportscaster. But now… game on!