The latest Investing Matters Podcast episode with London Stock Exchange Group's Chris Mayo has just been released. Listen here.
The ‘short attack’ in terms of declared shorts is negligible at 0.6%. Yes there may be more than that below 0.5% but there are dozens of ftse companies being shorted at far higher rates and it is not always having the severe impact it has here. My guess is that GSA took the short out based on the rising operational costs and not on the falling V price. In the last six weeks the v price has been collapsing which has been a bonus to them as it will be also eating into our bottom line. They did increase the short less than 4 weeks ago. They will be out ( at a good profit) when there is a reversal in the v price and/ or the company can declare that the operational costs have reduced to levels of late last year.
Rather than set an unrealistic target for the sp I am looking at a series of milestones over the next nine months or so rather than a specific price. If these milestones come off then the share price will increase. There will be a few bumps along the way, hopefully not as many as the last two years. The shareholder base has a very large PI proportion (too large) and that is certainly adding to the volatility with multiple traders constantly diving in and out. I am looking at the following to happen:-
Increased production and lower costs (back under $20). Kiln 3 should be operational in 2022 , no more missed targets. No more unplanned maintenance periods. (Q4 2021 and Q1 2022 may be key here)
A rise is the price of V. Obviously not in the companies control but 2022 broker estimates are based on an average of $45. (Ongoing)
No further delays in the Electrolyte plant, and some information about orders/ contracts ahead of commissioning. (Ongoing to H2 2022)
No adverse impact by the Duferco/Orion debt arrangements on the share numbers, any issuing to new shares to be at an absolute minimum (Q4 2021).
Easing of any Covid restrictions impacting supply chains, etc. (Ongoing).
Some BE news!!!
I’m ignoring the mini-grid (appears to be way behind at present) and things like Lemur/JSE listing (don’t believe either will happen in the next year).
The shorting of the stock should make absolutely no difference to the operational performance of the company. They are not directly connected. People make think that a low sp may inhibit possible future financial arrangements, but we have managed to get some fairly expensive debt agreements in place (Orion/Duferco) before this, the South African junk status (Moodys et al) will also be more of a factor.
China certainly controls the price of V. I had hoped that we could have progressed on the various fronts the company is developing but it seems that for now it is not in a position to report these to the market. We need the price of V higher and the costs to be lower as this will impact the bottom line. The H1 figures are out in the next week, I hope these can be released before the 30th as the sp needs something to lift it from this downwards drift.
The short position is unchanged at 0.6% which as things go is fairly small. Complete lack of any buying pressure, its been like this for a long time. Yes there could be shorts opened below the 0.5% figure but as far as I know the stock on loan figure was not showing any great increase. As I have said before this needs an urgent injection of good news on multiple fronts, not holding my breath though.
The buying pressure is zilch and has been for most of this year. With very little new news to report to the market sentiment has drifted. The only thing the company have direct control of is the costs which need to come down, they have no control over the V price which the Chinese have a solid grip on. At some point the company will need to inform the market of a reduction in costs.
He isn’t going to though, he has been gifted millions of shares over the years as have other directors. I know he bought 500,000 around 2015 for about 3p but that was his only purchase. I think another director also bought just after that. The director/ managements shares bonus should be linked to sp performance but there is not a cat in hells chance of that.
I do not think the sp is of any priority or even importance to the company/bod. The plants operate regardless and staff get paid. I know fm has a considerable number but he cannot exactly start.selling them aside from a small number for tax reasons.
That equates to just over a million shares. I agree that it looks like they have increased today, similar patterns. Think the initial short was at 13 , this at 11. Absolutely no buying pressure making this very easy for them. They may be looking at the V price and its impact.
Asianmetals do report prices buts its only available to subscribers. . You can see the headline but will not have access to the article or price. They have been reporting drops in the price of V in China for a number of days.
Don’t believe this is directly to do with the short, in the scheme of things that is relatively small at 0.5%. They could be increasing it, in which case we will find out soon but there will be other short positions under the radar.
There is the question of what the profitability currently is, we need to make a good net profit to cover future obligations but what it is remains unclear. We will only find that out when the financials are produced. I have alsoseen that the large selling could be Duferco pre-selling but again that will not come out (officially) until a later date..
I would certainly like to see any improvements in the reduced costs highlighted for Q3 , thats is in the hands of the company. Price of V has taken a bit of a knock the last couple of weeks and we could do with that stabilising and going back up. Not sure though if the company is in a position to confirm reduced costs and its going to be Q4 or even Q1 2022.
Not unreadable points but ultimately what drives the sp, and by association the mc, is buying pressure which to be brutally honest has been practically non-existent for a very long time. The operational updates have not helped - higher production costs, missed targets - and the nature of AIM with a limited amount of cash to go round at any time means we are given a wide berth.
I agree that we need to see confirmation of improvements in black and white from the company, whether its lower costs, improved production, associated profits, other outstanding and hopefully good news.
Just checking GSAs shorting record and how long they tend to keep shorts running. In this case they only opened the short less than two weeks ago. They seem to keep these running for a few weeks at least , sometimes adding as they go along. Saw an example of them keeping a short open more than a year and another where it was open and closed in a day.
They have been very active over many years shorting but Bushveld is the first short they have taken out since last year after shorting dozens of companys. Everything else was closed, at least below the reporting threshold last year