Vertex Energy Potential Multibagger Refinery Play

Research & Analysis Long Term
1

So I had a friend link me this dd on VTNR and it looks like a really interesting play. It’s up 55% since earnings but still looks like fairly good value.

https://twitter.com/CSuiteOperator/1521828248920932355

https://mobile.twitter.com/CSuiteOperator/status/1521828251307548674

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2

I started a small gamble 6/17 position in this a few days ago because it looks like a breakout might happen to the upside.

si is around 30% and they are almost 40% underwater at this point. Reddit is also slowly starting to notice this stock, and it moves in dollar increments with very little volume compared to its float (at least the float that Heimdall reports) so if it gets pumped more than it currently is by algos, then it might see covering.

Maybe I’m wrong, but I think if we see consolidation over the next week at the 17-18 level, then there is a chance of a short squeeze into opex. Nothing monumental, but enough to have some fun with.

If I’m missing something and talking out of my sphincter, then please feel free to tare me apart on it.

3

There are other reasons to be long in this company but I don’t think you should take a position with the anticipation of a short squeeze. Vitards had a decent DD on this but they ruled out a short squeeze because it looks like the shorts are just hedging since they are the convertible bond holders.

Vitards DD: https://www.reddit.com/r/Vitards/comments/useraw/dd_vertex_energy/

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4

image

Honestly it’s not the worst setup. Not saying they’re drowning over 100m but that’s pretty close to the point where we would historically see some covering. Definitely could be interesting and get a little pop especially with energy on a tear right now.

5

1.) I looked at the DD and did not see an explanation for why convertable debt would not translate over to traditional short covering. Can someone explain this to me?

2.) The average short price has increased from $8ish to 10ish over the last week. To me, that implies that there is some legitimate shorting. Again, I could have no idea what I’m talking about.

6

Seems like they are employing this strategy:

So they wouldn’t really face much pressure as they can just convert their bonds into shares and exit the short position. Although I’m not sure if there are any restrictions on when they can convert.

7

https://twitter.com/CSuiteOperator/status/1532765131242889221

https://twitter.com/zerohedge/status/1532733787582472192