HOKU slid 6.9 percent today to $11.71, adding to a downfall that began with an intra-day high of $14.55 on Monday. That's a haircut of 19.6 percent, slightly more than the previous pullback in late June of 18.5 percent.
Is the buzzcut done? Perhaps not. After all, HOKU was at $4.50 five weeks ago, so the run-up on polysilicon contract news is still huge even after the slide (160 percent). Bears can easily argue that there's no real floor here, and that their counterparts really have no foundation to stand on. Bears roar, "Where's the revenue?"
Bulls snort, "It's on the way!"
Best-case scenario has HOKU collecting on its non-binding contracts of $1.2 billion by mid-2009. Bulls can point to this six-day slide on diminished volume and say that there's no real strength in this selloff.
Friday, July 13: 4.3 million shares traded
Monday: 4.7 million
Tuesday: 2.9 million
Wednesday: 2.5 million
Thursday: 2.3 million
Today: 2.2 million
These numbers pale in comparison to volume numbers during the run-up.
June 21: 26 million
June 25: 33 million
July 6: 10 million
July 9: 11 million
Of course, this is no indication that HOKU has found a bottom at $11.71. But, the last time I explored the possibilities of a long overdue haircut, I surmised that $11.85 may be the floor based on an 18.5-percent pullback.
Whatever traders and market makers do with the stock will be intriguing to watch. For longs who are looking a year, two years down the road, there should be no anxiety. After all, should HOKU fulfill its responsibilities, $14, $11 and anything else below would have been a bargain.
Even Hoku bear Motley Fool points to micro-cap companies as big winners, when chosen wisely, of course.
For now, the bears can have a weekend party.
Disclaimer: Pupule Paul is a teeny bit long HOKU.
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