Positive Sign: Short Selling of Magnum Hunter’s Stock Decreases

positive signShares of Magnum Hunter Resources’ (MHR) stock have, like almost all other oil and gas company stocks, taken a beating over the past year. In September the New York Stock Exchange sent MHR a notice that their stock has been trading under $1.00 per share for more than 30 consecutive days and is in danger of being de-listed (see Magnum Hunter Stock Avg Falls Below $1, Receives NYSE Warning). At one point in the past few weeks the stock traded as low as $0.30 per share. We’ve previously covered how a company’s share price affects its ability to borrow money and remain in business. We’ve also given you a tutorial on something called “short selling”–traders buying stocks on the bet that the stock price will go down instead of up (see “Short Selling” – An Important Signal for Marcellus-Related Companies). If a significant number of traders believe your stock is moving lower, and it’s already under $1.00 per share–let’s just say that’s not a good sign for the future health of the company. Short selling of MHR stocks decreased rather significantly from the end of August to the middle of September–which is a sign that investors believe the company’s stock is heading higher…

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