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XONE market dynamics -2

11:11 19-Oct-15


XONE has rebounded an impressively (over 85%) from the low of $5.81 that I called in August.  However, the rebate rate has declined to ~55%.  While this is still exceptionally high, the decline indicates to me that some of the gains have been induced by short covering, which is typically not sustainable on its own.  Long term price appreciation will have to be driven by fundamental development at ExOne.  The only clue that we might see evidence of that by the next earnings report, due in the first half of November, is the insider buys that I documented at the time.  In the meantime, the stock price may have also been unduly influenced by the general market and misinterpretation of other news in the so-called sector.  I am incrementally more cautious about XONE at these higher levels.