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Marrone Bio Innovations: A Viable Candidate For A Massive (4X) Shortsqueeze

Oct. 19, 2014 2:41 PM ETBIOX
Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Summary

  • All MBII's public float is shorted.
  • MBII's executives & directors and major direct & top institutional & mutual funding holders will not sell in loss.
  • Modest buy pressure can generate a massive short squeeze that can drive the stock price up to approx 4 times the current level.

Marrone Bio Innovations (MBII) has:

- 24 million shares outstanding;
- 1.2 million shares held by MBII's executives & directors;
- 21.1 million shares held by major direct & top institutional & mutual funding holders;
- 1.7 million shares shorted (all the public float is shorted).

Assuming that the 22.3 million shares holders (MBII's executives & directors and major direct & top institutional & mutual funding holders) will neither allow the borrowing of their shares (in order of avoiding price pressure) nor sell in loss and given the prices they have bought their shares, they will not sell before approx $ 10.

So, having been shorted all the public float, a modest buy pressure can generate a massive short squeeze that can drive the stock price up to $ 10.

According to the last quarterly report MBII has cash and cash equivalents of 58Million$ and a stockholder equity of 65Million$ against a market cap of 68Million$, so MBII is very interesting and greatly undervalued not only for technical reasons but also for its fundamentals.

Analyst's Disclosure: The author is long MBII.

The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it. The author has no business relationship with any company whose stock is mentioned in this article.

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