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Affymax, Inc. Message Board

  • sfvictim sfvictim Sep 13, 2013 2:10 PM Flag

    Light Volume Hinders Short Attack

    The shares are very difficult to borrow and the shorts have to pay interest on their positions. Light volume makes it difficult to cover, weakening the Days to Cover Ratio. I would expect them to pepper Seeking Alpha and other sources with trashing articles to sustain the negative bias. However more than two per week would lose credibility. They've already had the last word two times recently and a lack of response almost puts them "on ignore." Both longs and shorts are in the same boat -- we suffer from a lack of news or resolution. In the meantime, we're witnessing a perception battle, absent of facts. Shorts are favored by the tax loss selling season and longs are favored by a nearly complete change in ownership. That's why we're stuck in a tight trading ranger (until we approach October options expiration). Speaking of which, the open interest on the October calls completely dwarfs the puts, suggesting that most of the calls were purchased as a hedge. After expiration, many shorts will have to find a new way to rehedge or close out their positions. January could be even more explosive because there won't be any tax loss selling pressure. BTW, I don't expect the Omontys issue to be decided for a long time.

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