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Message: Buyers need sellers....why I think delivery failures are important
I know this isn't as exciting as the potential for Apabetalone to treat a myriad of different diseases and conditions....but I do think its vitally important in terms of where the PPS is right now, and where it might be heading.
This isn't anything fundamental about the company...its simply the nuts and bolts of trading RVX shares.
Obviously when someone is buying shares there must be another (or others) willing to sell. We know that with Resverlogix that trades settled up to October 31st that almost 1 million shares (over 990K) had been sold short. If shareholders aren't willing to sell its possible that their shares can be borrowed and sold by others....provided the shares are held in a margin account.
Short selling is a good thing in many ways, it moderates volatility and improves liquidity....those who wanted to buy the bad news of the miss on Top-Line would likely have been paying more than they did if it wasn't for others willing to take on the risk of borrowing and dumping shares back into the market.
Now we see that today, on Friday November 8th, Resverlogix showed up on the TSX Buy-In list with 10,000 shares showing as having been undelivered. That means that one or more short sellers had failed to locate 10,000 shares and deliver them to the people who paid for them. The trading tape shows that the fail to deliver was satisfied with 10,000 shares bought today at $1.60 by house 100 ....rather than the $1.46 which was the PPS at that time.
What does this mean going forward?
It suggests to me that shares of Resverlogix are in very short supply....and if/when buyers move in, that locating willing sellers may very well require MMs to significantly raise their bidding prices inorder to find willing sellers....and that going short may very well not be an option going forward for a while.
We have 5 days of trading remaining before data, data, data....if volume and the PPS starts moving I think its possible that FOMO could kick in. Shareholders imo are more prone to talk about a holding that's on the rise: "You see what my stock RVX did today? It went from X to Y". "Really....was there news or something"? "No, but they're due to be annoucing detailed results from their Phase 3 trial at a meeting of the American Heart Association on Saturday".
I don't want to put the cart to far in front of the horse...we've got the weekend to get through and then we shall see what happens. But I am cautiously optimistic we could see a run next week and I'm hoping its substantial.
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