ACapitalist

InterOil: Uncertainty Fading

Well with the short interest at 45%, it looks like someone is taking the short argument seriously. I call 15 million shares short serious. The short argument is simple in concept. Simple does not make it right or wrong. The geology is complex. The fact is they have no proven reserves yet. My point that other readers may want to think about is that an investment in Interoil is really a binary investment based on the gas find at Elk. If it is big enough to support a LNG plant, the company will succeed, if it is not, the stock will drop like a rock. It is either A or B. Binary investments are risky.
A word to the wise in investing, pay more attention to those that oppose your viewpoint rather than making personal attracts on them. An investment in any company should be dispassionate.

InterOil: Uncertainty Fading

Actually, I do have a degree in Geology but I still think that the truth is difficult to know here. I agree with you about Picken’s investment. A bet against him on his home turf seems risky and is a big reason I am not short here. I think there is an old short thesis right up on Value Investors Club. Good luck to you and enjoy your steak or baloney sandwich, whichever it is.

InterOil: Uncertainty Fading

I find the co very interesting, mostly from a learning standpoint. The geology is beyound me to know which way this one is going to go. Too risky for me to go either direction on it. The short argument is rather simple. The gas find is in highly fractured rock that gives very powerful early flows but then blows down quickly thus not giving long term production. With out a long term flow rate, no LNG facility and you just have another worthless stranded gas find. The rest of the company has zero net value. Time will tell if management is blowing a lot of smoke or the independent geologist will confirm this "whale". Be careful on either side. The risk is huge on being "wrong".