Next up is the investor presentation on the 21st. This should be a bit more of a lively affair, as the analysts will be there. Probably be a few more questions from the audience than at the AGM.
It's been not so much a short attack, as a short campaign. Their issue has been how to manage themselves out of the situation. Clearly they have tried to hold the line at $4 and again at $5.
$6 will be problematic for them On the current volume, the SIR is 35, which is pretty high and a bit dangerous if a squeeze takes place.
Also, they have the ongoing rent to consider, and the increase in collateral they have needed to fork out as the sp re-rates (see below). In Australia, borrowers need to keep 105% of the value of the shorted stock in a margin account, so as the sp rises, they will need to keep topping up this account.
The difference between where they first sold and the current sp, less 5%, is therefore their current profit, assuming they sold north of $4.84. As their profit margin reduces further, it will be risk on.
Those that shorted at $3 or below would have been well and truly burnt by now. Others may still be averaging up. Anyway, there are 21.5m shares shorted, and the SIR, or days to fully unwind, at current average volumes, is conservatively 35 by my estimates. Which is a fairly risky spot to be in.
It's not comfy to have to keep topping up your margin account with profits you thought you could safely spend, and at the same time have to pay rent. And then there's the the ever present risk of good news, and an sp break out.
View attachment 822398
On Collateral Required to Short
Once agreed, the lender of a particular stock agrees to transfer a requested amount of stock to the borrower. In exchange for this, the borrower typically transfers 105% of the stock’s value in cash to the lender.
The value of this collateral is typically linked to its daily market rate in order to maintain it at 105%. This gives the borrower the ability to cover a temporary short position without impacting the market price of the stock (as the stock transfer was off-market) and the lender can access the cash for its own investment.
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This post is based on my own research and is not investment advice. When making investment decisions, always DYOR. 
