RE: Short Position across the board24 Nov 2024 00:12
Shorts are fleas on cardigans. More often than not, shorts are gamblers - pay attention to them at your peril.
The shorts' 'hope' is that when the Capita results are announced, that the revenues are down significantly. Regardless of the results, the shorts will try to drive the share price down from 8am onwards on the day of the results, and keep their fingers (knees, toes and everything else) crossed that loads more Capita shareholders follow their lead and sell. The reason for the shorts 'confidence' in this strategy is simple - Capita shareholders (whether short or long term shareholders) are for the most part best described as 'nervous nellies'. However, this time, the shorts are in fact far more nervous than before. This time, AH and co will show that Capita's profits are stable and improving, margins are stable and improving, and debt is significantly lower i.e. a drop in the bucket. In other words, Capita will be in a far stronger financial position than 12 months previously.
The smart investor knows that if AH and co can turn the Capita shop around so quickly in less than 12 months, what can they do in the next 12 months. The big question is will the rest of Capita's shareholders play 'chicken' and run with the sell off at 8am with the shorts, or hold their nerve and add on an early AM drop to defy the shorts, and drive the share price up to where it belongs i.e. 21-22p range as a minimum.
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