HHHMMMM, I wonder??? There are some things recently that don't make sense to me:
- Weakness in the stock price follow a great quarter
- The increasing in the short interest in the stock
- Declining / low volumes
When things happen that don't make sense to me, I try to find a rational excuse reason for what is happening. I think reading the MD&A that came out with quarter provided me with a scenario that may make sense.
In the MD&A there was a line towards the end in the Outlook that hinted at the potential for acquistions. I know John Pollard and Rob Rose reasonable well, they are 100% solid and I trust them however, when acquisitions are potentially in the works, there are lots of people working on them.
I am wondering if there is an acquisition and potential financing coming? I suspect that any acquisition will be primarily be funded with debt (as PBL's debt level is very low and may be elimated by year end) but there may be an equity component.
A 215k short interest could be covered by a financing. Being short Pollard has NEVER made sense to me. They pay a dividend and the borrow costs must be high because the family still owns the vast majority of the shares. 215k shares short could represent a $7M+ order for a financing, especially if it is a bought deal. Does anyone here know if PBL has been out marketing to institutional investors lately? If they have, that really ramps up my financing suspictions.
This also explains the declining volumes as potentially interested institutional investors will stop buying in the market and hold back their demand for a financing.
Just a, "Things that make you go hmmmm" thought that crossed my mind. I guess time will tell.
Regardless, there is no way the stock should have been down 4.26% today after releasing a record quarter with strong guidance and 6.8% in the last 5 days. If there is a financing, then the system is pretty leaky and will speak volumes about who the lead underwriter is. I have my suspicions but I won't say.
Regardless, the stock will go higher based purely on its fundamentals.
Lets see.