A little background to begin. ASO IPO’d in October, it’s trading roughly 100% higher than ipo price. Myself and others have made posts about the business and it being a solid play. It’s a strong company and Er the 30th (Tuesday) , one day before ipo lockup ends. I’m confident it will do well, and see it being ~$30 by summer no matter what barring a market crash. However I do have a question before I get to my main point:
My question is this. Specifically in regard to ipo lockup shares. Can they be lent out for shorting during the lockup period? I’ve searched and can’t find an answer there. It is not exactly important to my next point, but I just actually want to know.
ASO is 70% owned by tutes, and by outstanding shares is shorted 15% so not overly interesting in the post covid crash era. 48% of the float is short by the latest numbers though. This kind of leads me to believe that the lockup shares can't be lent, but again, largely unimportant.
The really interesting point to be made is this; assuming they do blow er out of the water (very good chance, er estimates were revised slightly up because they doubled expectation last time) we know for certain what range the shorts were opened in. It hit ATH of $28 about 2 weeks ago, so there's some there, however at the time it hit that it already had high 30's % of the float shorted. AKA it hits 29 and every short is losing, 100% guaranteed.
So with our er beat assumption and upward price movement, there is an interesting dilemma for the shorts, the IPO shares are locked up until the 31. THEY CANNOT BE SOLD. As far as short covering is concerned they don't exist until the 31.
And before the comments come in, yes I know how squeezes actually work, I know not everything is a squeeze, I know this can potentially not happen, I’m not in it for that alone, it’s a bonus. I’m already sold on the business and the strong fundamentals. I’m more curious what other not absolutely retarded folk think (more importantly know) about the ipo share lend availability and if it actually acts a detriment to a potential squeeze happening because of the lockup shares, or if its throwing gas on the fire. Either way I’m expecting a solid er and a nice little run, if for no other reason for the ipo buyers to make maximum tendies.