2.9 million shares short?????????
If you plant a garden it is perfectly natural to periodically check on its progress. The same holds for owning a stock. Having a vested interest compels one to seek out some sort of forum to pick up the gossip and take a reading on the mood of others who hold a vested interest. So, we have the Stockhouse BIR board, - though I can’t imagine there would be too many others for this stock. And people do come. Some will post, others will read those posts without making any comment. They are free to do so. That’s how it works.
Now here’s where it r-e-a-ll-y gets interesting. There is a single divide marking two distinct points of view,-the longs and the shorts. Antithesis in the pluperfect, yet we all swim in the same tank. I have heard that the current short position in BIR is about 2.9 million shares. If true, it’s safe to assume (for such a large position), that the bulk of those shares would be held by a single entity. Unless I’m mistaken, the “naked short” is still allowed, and that is tantamount to allowing any person (with zero vested interest) a key to your house so that they may enter it at will, making free with your property, all blessed by the regulatory authorities who give it the stamp of law. But to be completely fair, one must mention that the most popular argument for shorting stocks is that it allows for “accurate price valuation,.” something that apparently cannot be achieved exclusively by the longs, over time, in the normal course of their trading. They need added help from their mentors the shorts. But it isn’t all altruism on either side, as the profit motive is first and foremost.
Some time back, National Bank came out with a bullish call on BIR. At the time it was in the $6.75-7.50 range. The stock rallied to $9.00 and then plummeted to where we are now. My guess is that the shorting began at the $9.00 level. The shorts just kept selling into the demand, satiating it, until the price ended up trapped, somewhere between the $7.20-$760 level. With entry and egress confined to within this band the shorts simply grind it back and forth to eke out their gains. Fanciful? Possibly. But there could be more than a grain of truth to it.
Of late the BIR shorts have held court. But if you have been a steady reader on the Bentek site, where a concise daily synopsis of the NG market is provided, or if you have been charting the NG rig count level (Baker Hughes) you will see that things are changing in a positive way in the North American NG market. Most particularly, Alberta is shipping heavily into demand coming from the U.S Pacific Northwest and the U.S. midcontinent. Demand has been strong in Alberta, Saskatchewan and Eastern Canada where NG storage stocks are low. This has strengthened NG prices at the AECO hub, - all very beneficial for Birchcliff. Just maybe the shorts have taken the BIR price too far the other way. I’m quite optimistic that this will be a wonderful next quarter and the Feb. unaudited report will bear this out in spades.