RE: hey I agree bugoffWow, I didn’t think the shorts would be that high… any reasonably good news and they could be in deep trouble. I tend to like short traders when companies are in the position that Westport is in; you know that if there is a good news release, at least some of those shares are going to be covered.
The reason that I think Tuesdays action was margin calls (or near calls) is that all of the markets were taking a beating, and the share price dropped so low with high trade volumes (like 200,000 higher than the recent daily average)… and then today the price was quite stable again; and the volumes dropped off again. However, the stock very well could have sold off (and still be declining) but there is one reason that I don’t think it will; and that is this “possible pending foreign listing”.
Lest say that Westport is looking at listing in the NASDAQ; in order to get listed, they have to have 4 market makers who will support the stock for a pre-determined period of time; who generally get to take part in the financings if and when they occur. Now if there are already 4 potential market makers for the WPT entry, they may be very eager to support the stock at these levels just to prove that they have faith in the Westport stock… good faith, if you will.
For as much as I agree with people that Westport “should sell off” at some point throughout the summer (historically it tends to, but not always), I personally don’t think that it will; and here is why. The stock will be supported, because there is a high probability that at least 4 (and probably more than 4) houses want a part of the next big financing, and showing their support now will ensure that they are sitting at the table when that happens. Plus, for every $5.00 stock they buy now, they could very well make 100% or more when the listing is announced, etc…
Let me say this; if I thought that there was a reasonable expectation for the stock to sell off, I’d be out now, and waiting for the big slide. In fact, I’d probably have a buy order in for $3.60 as I write this. But I highly doubt that the stock will even touch $4.00, and if it does it will be in intra day low, with so very little volume that I would only get a partial fill.
Now the difference between $4.00 and where we are now, simply does not make it worthwhile… even if your holdings are inside a self-directed RRSP (and therefore tax deferred), it does not make much sense to me… couple that with the highly likelihood that we will see a very positive NR in the foreseeable future and you could easily be left standing on the tarmac watching a rocketing stock slip away from you; when you very well may have owned it 3 days before.
… I’m in now, and I’ll stay in for the near-term anyway… I’d sooner be sitting in front of a sleepy bear with my shares in my hand, than running behind a racing bull with a sac full of money, trying to catch up...