I remember when Nanosonics was one of the most heavily shorted stocks on the ASX:

Between March and September last year, over 10% of shares outstanding were shorted (average price over that period was about $4, and for 90% of the time it was below the current price).

My best guess was that these were valuation based short positions -- after all, the business had more cash than a small nation, no debt and surging revenue. It was a dumb bet that this thing was every likely to be insolvent anytime soon!

And, sure, 10x sales (or thereabouts) wasn't exactly cheap. But here we are a year later and we've got another strong uplift in sales (38% higher) and record pre-tax and free cash flow. I'm not sure shares are exactly cheap, but it was a real head scratch to see it so heavily shorted.

My only point, i guess, is that Shorters seem to get far more credibility than they deserve. And if you're going to do it, at least bet on business failures and not on valuation grounds -- remember, the market can remain irrational longer than you can stay solvent!

Interesting slide from the Nanosonics AGM presentation, which corresponds to what I was trying in the above graph of Share price vs Revenue over the years.

How the company has evolved from 30th June 2019 to 30 June 2023

How market has reacted for the same period ( 30th June 2019 to 30th June 2023)

The rate environment is of course different from 2019/20 - but the business has definitely executed.

Yes. The repeated delays with commercialising CORIS haven't helped either.

The valuation is pretty full in any case, even now.