This was put on ADVFN, and copied here as to questions raised by others as to why the share price is weak at the moment.
TXP is being shorted, simple as that.
As of 1st of January 2021 TXP was removed from the UK FCA list of stocks requiring short disclosures, as its Canadian based. This means anyone can short the stock in London and does not have to disclose the short position.
Currently over 9 million shares are short TXP.
The Hedge fund doing this are "capping" the price at the moment - meaning they sell 50K or 15K or 25K etc.. whenever any momentum pushes the share price up. They can now control the share price with ease by dumping a few blocks and hold the weighted average price down.
WHY ?
Either of:
A/ They are being paid to do so for an entity which wants to make a lowball bid for TXP after the Rosyton well is complete. Having a nice low 3 month or 6 month weighted average price allows any prospective buyer to put in a lowball bid.
TXP in Q4 20/Q1 21 will have minimal cash, some debt, using debt and massive cashflow coming in later......perfect position to be snapped up cheap - you dont buy cash rich companies, you buy debt. After Q2 21 the price to buy TXP will be massively higher and it will be unattractive then to everyone but majors, who at that time it may be too small to be of interest until after Krakken.
Why after Royston - the seismic and a well to 10,000 feet are the final requirements of the license, so when Royston-1 is done all license obligations for the period are complete (seismic just finished) - then its open season for a hostile bid.
or
B/ The Hedge fund is gambling - they believe that they can close their short for a massive profit on Royston failure - or they have enough leverage through their "connections" to force TXP into a fund raise post Royston, at which point they can close their short and take a big long position into the cashflow coming on stream.
The one thing that will "screw" the Hedge fund is IF TXP announce a new debt deal or expansion of their current debt facility, and its a point I will be writing to Paul soon. Any news of a new expanded debt facility will mean the short cannot get their "placing" and they will have to close buying shares from the market, hopefully buying after Royston success and not Royston failure.
So the current weakness is due to the short position of over 9 million shares and ongoing price suppression to keep the weighted average price down.
The Hedge fund doing so is "capping" the share price, regularly dumping blocks of 10K or 15K or 20K or 25K or 50K into any buying - to stop the share price rising and encourage people to "give up" and just sell their stock. Impatience is the shorters power.
Only one thing, imo, will change this, and that is TXP announcing a new debt facility or an expanded debt facility - IF they do that, its game over for the shorting hedge fund and they then have to close.
The question is why do they feel confident ? Do they have an inside person now on the board of TXP who will push for equity to be issued and not debt used ? Do they feel confident they have enough power over the companies Brokers to get them to push the TXP board into a "friendly" fund raise ?
So, ahead in few weeks time, I will be writing a very long and detailed email to Paul which I will post in full on the boards, on behalf of a few share holders and asking him to pass the points on to the board of TXP for their consideration only.
The main point will be a push to use debt, either bank borrowing or RBL, and under no circumstance to use an equity fund raise and to be very suspicious of anyone who attempts to "persuade" for an equity fund raise - given the short position and vested interest of those parties for a fund raise by the placing of new shares.
Any equity fund raise should only be considered WHEN Cascadura is online. Thats fine, to raise fresh funds from a position of strength if so needed. Raising money by equity fund raise before Cascadura is online - when they can use debt - would be shareholder value destruction by the board of TXP and its the point I will make to them very clearly and openly so that nobody can claim to be blind to it.
Quite simply, with the money that Cascadura will throw off when online, they can pay back any new bank loan in 2023 completely, simply, so easily. It would be an absolute joke if they did not expand their debt now and went for an equity fund raise - and my email will let them all know that many TXP shareholders will be very upset if the board in full knowledge of this, were to opt for equity fund raise and not use debt.
With the short position where it is, any "placing" would be highly dubious given the proven, flow tested, verified and certified reserves that can be used to borrow against and there will be a lot of questions raised if anyone on the board of TXP decides to opt for equity placing instead of using debt BEFORE Cascadura is online.
All IMO, DYOR !!