Why Are People Shorting Nano-X?
On Sept. 15, short-seller Citron Research offered a scathing "analysis" of Nano-X (NASDAQ: NNOX), a med-tech pioneer that's discovered a cheaper way to provide medical images like X-rays and CAT scans. It's a "complete farce on the market," Citron wrote, and " ... this stock is heading to zero." Synched with the release of the report, Citron opened a heavy short position to send shares of the company sinking.
Several days later, another short outfit, Muddy Waters, accused the company of faking a demonstration video that showcased its technology. "NNOX almost certainly used somebody else's chest images to try to make its ARC [medical imaging] machine look real," the bear insisted, without any proof.
So what should our attitude be toward these clearly biased short-sellers? Should we ignore them? Or maybe we should love our enemies. After all, we know that shorts are always future buyers of our stock. (Even if they don't want to buy, sometimes the brokerage will make them buy, a happy day that we bulls refer to as "the short squeeze.") Also, if we're buyers, we should be happy that we're getting a cheaper price. And finally, every once in a blue moon, the shorts are right and we are wrong -- so maybe we should heed their warnings. Let's investigate and see what's what.
Source Fool.com
