Dramatic Surge for Raser / Possible Short Squeeze?
Not sure if anyone was paying attention to it, but about 3 PM yesterday afternoon, Raser Tech's (RZ) stock experienced a dramatic surge from around $4 to $4.70. This was after trading in the $3.10 - 3.40 range a few days earlier. It is possible a short squeeze is occuring right now. The other alternative might be a large buyer coming in. I can not find any headlines on RZ that would indicate this spike was news-related.
IMO anyone shorting RZ right now is making a really bad bet. Despite their heavy debt load and low liquidity - their properties, intangible assets, and know-how are probably dramatically understated and don't really show up on the balance sheet. Going short, you might luck up and get a 40-100% return, but you risk a -1000%+ return to do so. Once they get their plants operating, the stock could move upwards in dramatic fashion.
Despite its one-star rating on TMF, large short interest, and huge amount of detractors, I think RZ is a good candidate for one of the biggest surprises of 2009. I did a write-up on it for Seeking Alpha a few months ago for anyone interested:
Raser Tech: The Ugly Duckling of Alternative Energy
If indeed a short squeeze is going on, there will probably be a short-term pullback so the daring daytraders out there might want to try a quick red thumb. As for me, I'm on the long side. I thumbed up on CAPS in the upper $4 range - I was a little early, but that's alright. In real life, I went long at $3.25. For those thinking of going long, you might watch it a few days and see it the price retraces a bit. As I suggest in my article, this is not for low-risk types; RZ is a high-risk stock and I think it's a good piece in a well-diversified portfolio.