MuddyWaters, $NNOX, Short Sellers and AI
If you ever wanted to see an example of “sell the news”, panic sellers, or likely a coordinated short attack, $NNOX or Nanox Imaging is a prime example. On the Monday after the announcement of their FDA news, the stock rocketed pre-market then all of a sudden started to go down. I have been collecting some insights on sentiment, looking at the short sale volume, and seeing what types of activities been popping up in the meantime. To me, as one of these supposed bag holders, I have been watching Nanox prior to IPO. The volatility is there, and I am not always the first to cry foul. However, I think this looks to be a coordinated attack on the stock, and I still reiterate my long position. This article will list some of the activities I have noticed.
#1 Fintwit Gurus
Whenever I see a rise in regards to people shortening early in the morning, or popular trading influencers laughing at a stock going down or announcing a short position, I always wonder what is going on. However, w/ $NNOX the message volume on Twitter was very high, and the message volume on Stocktwits was over 145%. This is where things get suspect.
#2 Negative Sentiment
The sentiment has been incrementally going down throughout the day, all the way to 6.18% given response to a positive catalyst. Lots of messages started popping up on Stocktwits (which seems unmoderated), calling Nanox a “fraud”, making fun of the FDA or making it sound like they were rejected.
#3 Short Side Volume
Someone said that $NNOX short volume was up by 3200% on the day of this sudden decline. Here is a look at the Fintel data, and that looks to be true.
True volume was up substantially in general, but the short volume ratio was ridiculously high.
Another thing to look at is the TRF data and data for the end of the day.
Looking at the last three trading days, it was substantially high. These are even much higher averages compared to the previous three trading days. The 5 minute RSIs also have insane low points. Given all the selling and negative put orders that happened during a day like Monday, I am suspicious. This is given the fact that $NNOX announced FDA when the market was closed because of holidays, as well as the fact that people had three days to respond to the news.
The response right at premarket open was overwhelmingly positive, then suddenly it started crashing dramatically with sentiment insinuating that $NNOX is a fraud or worthless. It seems like more and more shortsellers have been piling on $NNOX in the early morning, and it seems like certain groups came somewhat prepared.
#4 Re-emerging Faces
Some of our favorite friends like RichardxRoe and MuddyWaters started re-emerging across social media and blogs. Obviously, if we are going to be clear, it looks like MuddyWaters is likely still shortening Nanox Imaging. The borrowing rates are insanely high, so if he is, it looks like there is a massive short squeeze potential.
The arguments against the CEO in regards to intent to sale or sale are irrelevant to me right now. I also care less about how the device looks or taking certain quotes out of an interview minus the context. What I do care about is that they got FDA 510(K), and now they want to do the same for multi-source. This is a milestone in regards to the overall direction of the company.
Also let us look at a case study, shall we?
Quantumscape is another company w/ supposed $0 revenues by short-seller’s standards and is at a $18.62B market cap. I am not recently following $QS, and this isn’t why I am writing this. Many huge companies employing hundreds and sometimes even thousands of employees, that work on things such as supersonic planes, electric VTOLs, and cancer treatments would be worthless by the same standards.
Legally binding letters of intent and contractual agreements are legitimate revenue or expected revenue sources. They also have addressable assets such as an extensive IP portfolio. It is no longer the 1970s and 1980s and times are changing when valuing high growth companies.
I do engage in research related to the sensory tech and medical device industry. However, I hold no relations to Nanox Imaging or working with Nanox Imaging. My only current conflict of interest is being long on its stock.
Disclosure: Please keep in mind, everything I say is on an opinion based basis. This is not meant to be taken seriously or as actionable financial advice. Do your own due diligence and any trades/investments you do is at your own risk. We are not responsible, proceed with caution and we are trying to voice an opinion not meant to warrant action. This is solely meant to be viewed as a non actionable opinion not meant to be taken as seriously or as a form of actionable advice.
