Two developments this week are a harbinger of the forthcoming demise of the shorts who have infested UNXL and thwarted its natural rise by their lying and spreading terror on the message boards and other outlets, and by their marking the close, painting the tape, and resorting to naked snorting to bash the stok price, until the point where they have built up a short position that exceeds the entire float and more than 50% of the issued shares. Their days are numbered and, one might say, short.
The first development is the severe drying up of the float that began last week, shortly after the successful secondary offering, as institutions have kept the price low and gobbled up all the shares they could at the bargain-basement price of $34, until the point where the combined institutional/inside holdings now constitute more than 60% of all shares, quite amazing for a little stock that just had its first profitable quarter. I expect the 'tutes to continue to enhance their positions until shortly before the close of the current reporting period, when they will take their foot off the brakes and let the rocket rise.
The second ominous development for the shorts is the huge decrease in the average daily trading volume, down a whopping 70% or more from the torrid average of 1,465,000 shares in March and early April, to under 400,000 avg the past seven days. What this means is that the shorts, who could have (in theory) completely covered in March in just 3.3 days, now need a gut-wrenching, sleep-killing, hysteria-inducing ten full trading days or more to cover as they all simultaneously rush to squeeze through the narrow fire exits.
The ShortSqueeze Rating on UNXL remains at 10,000, the highest of any stock in history, even though the purveyor of that Index has yet to adjust its computations to recognize the recently reduced daily trading volume, which will more than double the pressure and the panic.
Despite their continuing rabid rantings and threatening terror tactics on the message boards, I have found hard evidence that they have finally realized their mistake in going and staying short UNXL and are starting to cover: 1) Short interest dropped by 234,000 shares between the reporting dates of April 15 and April 30, 2) UNXL no longer makes the Daily Naked Shorts Sales List, 3) UNXL is no longer on the SEC's Reg SHO watch-list that notes those stocks for which sellers have failed to deliver shares by the closing date, and 4) the amount of short selling as a percentage of daily volume has dropped to 17% from an earlier range of 30-50%.
But this quiet retreat is all too little and too late for the shorts, still 4,168,000 shares in the hole (out of 11 million shares issue) and approximately $100,000,000 under water. It reminds me of a pretty spring day in Japan when, from atop a cliff, I witnessed a tsunami. All the water quietly withdrew from the bay, and all was calm for a while, and then in roared the biggest, most gigantic wave you could ever imagine, crushing and destroying everything in its path. It will hit the UNXL shorts before June 21. R.I.P. Less
Disclosure: I am long UNXL.