TSXV:MRS.H - Post by User
Comment by
SizzlinSteakson Oct 05, 2017 11:01pm
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Post# 26784124
RE:Reason why the SP was held down is evident - all is good
RE:Reason why the SP was held down is evident - all is goodI also found it quite interesting that the reduction / difference in the short position 32.5 million Sept 18th to 3.96 million on Oct 2nd matched almost exactly the number of warrants (28 million). Who knows, maybe they will have a bit of trouble covering the last 4 million without any more warrants being exercised. Hard to say.
SizzlinSteaks wrote: As most already know, the short position on MRS jumped to 32.5 million shares on Sept 18th after the announcement of the 400 million dollar deal. I think most were shocked to see this including myself. I don't think I have ever seen such a high short posiiton. That is 1/3 of the entire float. Clearly this is the reason why the stock was held in the mid to low 20 range. Admittedly this alone was enough to convince me to take my profit and sell. However, as perplexed as I was by this enormous short position I called the company IR to find out their thoughts.
The fellow with IR informed me there were 28 million warrants at 15 cents and this is the likely reason for such a large short position. He speculated that they are likely banking on the fact that these warrants will be exercised. Then to my surprise this Monday (Oct 2nd) the short position dropped down to just under 4 million. Given that was 4 days ago, I suspect by now most, if not all of those shorts are covered. If so, we are most likely headed higher. In light of this I decided to retake a position today.
Due to the exercising of warrants I am expecting the number of outstanding shares to increase by 28 million but we should also see $4.2 million in the bank on the next financials. I'm sure this would also take care of any near term cash concerns.
Have a good night all. I think we are in for a fun ride in the coming days.