What made GEVO so incredibly attractive is the fact that they have a history of diluting like crazy. No amount of insanity buying by unsophisticated inves … investo … cough … umm … people … can overcome insider dilution dumping. If you are able to find these situations, then you have a silver bullet. It is the ace up your sleeve as a short seller. This Dilution speaks to a greater concept that I use to explain to people who ask me why I prefer short selling:
A rock is not just a rock. A rock wants to be part of a wall. Someone wise said that (I think). I can’t remember who. But, his point was that even inanimate objects have a greater purpose. Stock is no different. It is created, and it is stock. But, why is it created? What is its purpose? It is created to be sold. Plain and simple. Stock is created with the sole purpose of being sold to someone else. If that is true (which it is), then it is probably in your best interest to do your best to figure out when this will happen and sell along with them … or hopefully front-run the selling that you anticipate (like GEVO).