Disclaimer: None of this is investment advice. The logic here may be bad and should not be relied upon. My assumptions may be bad and should not be relied upon. This post reflects my opinion.
Yesterday I posted about how I think that we’re in the Fight for the Dollar stage of this short squeeze. Some more details: Evofem had gotten a deficiency letter from NASDAQ because EVFM had closed under $1/share for 30 days in a row. NASDAQ gives a 180-day period to get back into compliance, which means closing at $1 or above for 10 consecutive days of trading.
EVFM closed on Monday and Tuesday of this week at $1.07. That’s two days out of the 10 necessary!
Based on activity over more than a year, I figured that the short sellers are doing what they can to depress the price and force noncompliance. Now that there’s a short squeeze, it’s even more important for them to stop a push for that $1 at the end of the day.
My conclusion from yesterday is that all stock priced below $1 is underpriced when there’s a counter-push to make absolutely certain that it closes at a minimum of $1.
I decided to test this out earlier this morning by buying additional shares from $0.94 all the way down to $0.82. I could buy at all those prices because it kept falling. I thought the risk of being incorrect is nonzero but low. After all, I believe Phexxi is a game-changer, and recent news that a major pharmacy benefits provider is willing to pay for it is super encouraging.
As of writing this post, the price has climbed to above $1–which is consistent with my $1 floor expectation–and then has dropped down some–which is consistent with my short-sellers-want-it-to-close-below-$1 expectation.
There’s plenty of day left, but if today closes at $1+, that will mark 3 of the 10 consecutive needed to get rid of that exclamation point noncompliance icon.