RE:RE:RE:RE:RE:VGCX' s huge short is reminiscent of Pretium. EdwardBlake wrote: It's being done by algorithmic trading. They target areas where a lot of stops are sitting. Short stocks below that level, trigger stops, cover short. Rinse,repeat.
The key word in your scenario is "cover". That would result in no net increase in shorts. That is not what is happening here where the number of outstanding shorts jumped by 1.7 million to a total of 3.7 million.
Eventually these borrowed shares have to be returned unless the stock price goes to zero. So it would normally be comforting to know that at least a large part of the share price decline is not due to fundamental changes, but by shorting.
In Victoria's past, a big jump in short positions was due to a related financing where the shares could be shorted in the market and replaced by shares acquired in a financing. I've seen this in private placements and in Orion's first divestment of shares. A private placement would not seem be a possibility this time, but it is possible that Orion could have an agreement to sell x million shares based on the share price at some future date. Not likely but possible.
Who else gains from a drop in Victoria's share price (other than shorters who hope to cover at a lower price)? A prospective acquiror. As I posted earlier, you can sacrifice a loss on 3.7 million shares if it means you can acquire the balance of the 62 million shares at a lower price if the current share price is several dollars below what it otherwise would have been.