1. Something is wrong that you do not recognize. 2. Nothing is wrong and you are well positioned to ride a great short squeeze. - jhawker85
Yes! Exactly. If short interest is sky high, but the reasons are specious, it’d be a great investment opportunity. The challenge, then, is to suss out the facts. I’d normally be more plugged into an investment, but I bought into AAOI a week ago. I did not expect to see such a sharp rise in the share price.
I can’t tell you what to do but here is a little information that I wrote up that could help you.
buynholdisdead
Thanks so much for the insights, Andy! I love reading the opinions of folks working in a specific sector and thus able to offer real world observations. Over time, they’ve proven to be most valuable.
Thanks, Strelna, for this bit o’ creative writing:
Here’s the thing: you speculated on a company with a 62% short position without knowing its reason. You are up over 36% in 8 days and still no wiser about the short position.
Encouraged by others, with style and panache you successfully crossed a river by leaping from the back of one crocodile to another just like James Bond!
On the other bank, we all applaud, lost in wonder at this feat of daring and set off to the shallow, fast-running ford which they say is some distance upstream.
I wish I could claim unique prowess but this is a matter of dumb luck/timing as a consequence of board participants who intrigued me with their opinions and captured my interest. I’m the sort who can’t research a stock seriously unless I’ve got skin in the game (i.e., “nothing focuses the mind like a noose around one’s neck”). I established a position that grew way faster than anything I had anticipated. Now I’m pondering whether to buy/sell or hold. GauchoChris, sjo and you suggest I take profits. I’m thinking y’all are offering decent advice.
“Battleground stocks”. I like the term, Saul. I never came up with a name for that unique subset of stocks that have widely polarized investor/analyst opinions (e.g., AAOI with “strong buy”, “conviction buy”, and “overweight” ratings counter-balanced by a short interest ratio > 60%). Whichever way the stock price breaks, it will likely be significant. That’s why I’m drawn to these types of “opportunities.” The challenge is to understand the battleground terrain.
I spent a good deal of the day pondercating my next steps. As I was dithering, AAOI rose another 2.6%. In addition, the optical networking sector rose (e.g., ACIA UP 7%, INFN UP 3%, etc.) So, here’s what Ima gonna do. I decided to sell half of my AAOI shares. But not immediately. The sector seems to be quite healthy and growing healthier. I need to pay attention.