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STUDENT TRANSPORTATION INC 5.25 PCT DEBS T.STB.DB.A



TSX:STB.DB.A - Post by User

Post by hc2111on Jul 29, 2012 6:54pm
340 Views
Post# 20163671

Where there's smoke, there's fire.

Where there's smoke, there's fire.

In that highly original and insightful comment, a previous poster summed up the easy way to make quick money on STB: Short it, create some smoke, profit from the fire. Short funds have been using that tactic on larger companies for a long time. STB is particularly susceptible for several reasons.

                It's owned by investors needing yield, which frequently means older people who are very fearful of losing any of their capital. So they are quick to run at any mention of smoke.

                The few funds that hold it are owned by the same people. So the fund managers are extra sensitive to risk of loss, and they also get out fast and ask questions later.

                The company's financials are complicated beyond understanding for non-accountants. And its's not followed by major brokerage. If somebody says there's smoke, there is no independent, reliable, arms-length expert opinion to rebut or confirm the innuendo.

                The stock only trades 100,000-plus shares each in Canada and US. So a rush for the door is always going to do major damage. 

                Management can help some by holding irresponsible, self-styled "analysts" accountable (if that is actually the case.)  Also by making the company's financing and accounting much clearer to laymen investors (to the extent that SEC allows such clarity).  One thing is certain: the shorts will be back.

              

               

               

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