Blinded by their own vision, the shorts pull the rope around their neck tighter…
InterOil announced a deal to pre-finance FEED work on a liquids stripping plant. It wasn’t (yet) the full deal that was expected, but enough to boost the share price. But also enough to embolden the shorts even more..
The ‘drip, drip, drip’ nature of InterOil’s development has kept the shorts alive thinking that their vision is still the right one.
One only has to go a few years back to read what they wrote back then to see how the bigger picture keeps on eluding them. For instance, Andy Left reports about imminent bankruptcy and stranded gas are quite humorous now.
The bigger picture immideately shows what a long way InterOil has come the last four years. So many things they bet against have happened already (world class wells, vindication for InterOil’s geological model, reef, dolomite, third party resource appraisal, Government approval for the LNG plant, cleaning up the balance sheet, NYSE listing, prime Wall Street analyst coverage, etc. etc.)
But somehow, as long as the definite knock out punch (in the form of a strategic partner for the LNG facility) hasn’t arrived, the keep alive, shorting more (and, as we have shown in numerous contributions here, distorting more).
This is death by a thousand needles. For the shorts, this is probably the worst scenario probable. As long as the knock-out punch hasn’t arrived, they redouble their effort and get sucked into their losing positions ever deeper.
Remember that when Barry Minkow started his campaign against InterOil, the shares were at 1/3 of the price today.
Psychologically, it’s difficult to concede one is just plain wrong when there is still some hope that you might be right after all.
But as any look at the big picture that is so eluding the shorts will tell anyone looking afresh at this situation, that hope, already very dim, is dimming more with every new sting..