03-07-2013, 04:05 AM
The shorts, or those that matter, clearly expect a bad deal (low price) and/or a deal full of contingencies, so that they can claim it's not really a deal at all.
I think they need both to get their "get out of jail" card.
If they get a bad deal with few contingencies, the whole narrative that IOC doesn't have what it says, is about to bust etc. etc. falls apart, and there will be a project, derisking much of the stock (unless the deal is sub 50cents/mcf, but I don't expect that).
If there is a good deal with contingencies, they'll short on hope. Hope that these contingencies will not be met, while the signing of the deal clearly shows intent. Good luck to that. I would say in this case, there are better shorts out there, but that's just me.
We're off to the races if we get a good deal with few contingencies. They clearly don't expect that.
Then there is the take-over "risk"
Having seen people throw all sorts of stuff lately, I think if you ask them now, is InterOil a good short candidate, most of them would answer no in an honest moment.
Too bad many of them don't seem to have many of these honest moments..
I think they need both to get their "get out of jail" card.
If they get a bad deal with few contingencies, the whole narrative that IOC doesn't have what it says, is about to bust etc. etc. falls apart, and there will be a project, derisking much of the stock (unless the deal is sub 50cents/mcf, but I don't expect that).
If there is a good deal with contingencies, they'll short on hope. Hope that these contingencies will not be met, while the signing of the deal clearly shows intent. Good luck to that. I would say in this case, there are better shorts out there, but that's just me.
We're off to the races if we get a good deal with few contingencies. They clearly don't expect that.
Then there is the take-over "risk"
Having seen people throw all sorts of stuff lately, I think if you ask them now, is InterOil a good short candidate, most of them would answer no in an honest moment.
Too bad many of them don't seem to have many of these honest moments..