11-30-2012, 12:22 PM
Some argue that institutions will take profit after the deal, but why would they? It's more likely that with uncertainty largely removed and wheels of monetization and accelerated exploration set in motion, more funds will buy in, especially after FID and more broker coverage.
All this will significantly shift the risk-reward of shorting, depending on the terms of the deal even dramatically so.
There isn't much, if any reason for them to stick around for the shorts. Big funds will buy-in more and more, the closer we come to first cash-flow and the more success we have on the exploration front and/or closing other deals like the one with PRE.
The terms of the deal itself could awaken a lot of people to the blatant undervaluation and upward potential, both on the monetization and exploration side.
Even a $1/mcf deal with some upfront capital removes most risk and set this in motion, and is twice the present market valuation at least.
Shorting is not exactly risk or cost free, and both the cost and the risk will move up significantly after a deal. Let's keep it real here.
Let's also not forget that naked shorting is illegal, and if it were that easy, why did they borrow 10M+ shares in the first place.
Let's not fall for this crap that we could never win from these motherfuckers, this is something Tonka would argue and I've long suspected it would be the last short "argument" standing.
In the end, the shorts want to make money, that will become that much harder and more risky after a deal, almost any deal, as it sets the wheels in motion towards monetization and accelerated exploration and removes most uncertainty and the room for them to come up with BS stories.
All this will significantly shift the risk-reward of shorting, depending on the terms of the deal even dramatically so.
There isn't much, if any reason for them to stick around for the shorts. Big funds will buy-in more and more, the closer we come to first cash-flow and the more success we have on the exploration front and/or closing other deals like the one with PRE.
The terms of the deal itself could awaken a lot of people to the blatant undervaluation and upward potential, both on the monetization and exploration side.
Even a $1/mcf deal with some upfront capital removes most risk and set this in motion, and is twice the present market valuation at least.
Shorting is not exactly risk or cost free, and both the cost and the risk will move up significantly after a deal. Let's keep it real here.
Let's also not forget that naked shorting is illegal, and if it were that easy, why did they borrow 10M+ shares in the first place.
Let's not fall for this crap that we could never win from these motherfuckers, this is something Tonka would argue and I've long suspected it would be the last short "argument" standing.
In the end, the shorts want to make money, that will become that much harder and more risky after a deal, almost any deal, as it sets the wheels in motion towards monetization and accelerated exploration and removes most uncertainty and the room for them to come up with BS stories.