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MDC Holdings Inc. Message Board

  • oldschoolbuilder oldschoolbuilder Apr 24, 2006 3:27 PM Flag

    Short Interest

    Interesting factoid:

    Short Interest as of 4/15/06: 4.675 mil shares

    Float: 34.53 mil shares

    Short Interest / Free Float = 13.5%

    Shares held by top 10 shareholders (i.e. "true believers") and index funds (passive holders) = 20.1 mil

    "Actively trading" float = 14.4 mil shares

    Short Interest / Actively trading float = 32.47%

    That's a VERY crowded short position for a stock selling near year-end liquidation value.

    Anyone nervous about that?

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    • <I just want to shoot the people who covered today. >

      Don't worry, they will shoot themselves tomorrow after they see the gap down following CTX earnings!

      Enjoy your short position tomorrow!

    • MTH up 8%

      That's what happens when shorts get scared.

      MDC's valuation relative to MTH is MUCH lower (relative to book value/liquidation value).

    • MTH just reported.

      Short interest is 15% of the float.

      EPS beat by 40 cents.

      The company bought back 3% of its shares during the quarter.

      Orders were so-so (strong in TX, weak in CA and AZ).

      Let's see how many shorts cover tomorrow (I think there are more shorts on the MTH board than this one).

      I am glad there aren't any nervous shorts here with MDC selling near year-end book value and way below liquidation value.

    • Actually, many subprime guys DO hold residual interests of subprime securitizations--and thus the first loss piece if credit goes south. Not all credit risk can be dumped. Banks have a steep capital charge for holding sub-prime assets and thus hold relatively few. It's the hedge funds and Wall Street prop desks who are buying/holding this stuff.

    • OK, how about Accredited Home Lenders (LEND-NASD). No dividend here. Up big after getting hit in mid-2005.

      However, LEND is a pretty well run company, but still leveraged to sub-prime credit.

      On the other hand, forget it--each short stands on its own merits. However, crowded shorts trading near book value are more prone to violent moves to the upside than other speculative stocks with not much to fall back on.

      Glad you feel OK with your investment.

    • NEW management has a history of using one-time dividends to burn shorts...very poor example.

      Historical analysis of short volume has not shown the expected contrarian buy correlation that one would expect due to the natural, eventual need to buy back the shares. Many academics have argued that this is because short investors are contrarian in view to begin with, and not given over easily manic or poorly thought out positions.

    • Check out what a short squeeze can do to what I think is a much riskier company -- New Century (NEW-NYSE--a leading sub-prime lender). It also traded near book and now trades 50% higher.

    • << Anyone nervous about that? >>

      I have no position at the moment, but if I were short I wouldn't be nervous. Both the technical reading of the stock charts and, more importantly, the fundamentals driving the HB industry, are uniformly negative and worsening by the day.

      With all due respect, it is those who remain long the HB stocks who ought to be nervous.

    • What makes you think that the "true believers" are prepared to go down with the ship?

      As the story continues to unfold...we'll see how long they hold on...

      Looks like a few jumped ship today....

    • I thought the float excluded the shares held by insiders and >5% holders. So deducting the insiders shares (and some of the larger institutions' shares) from the float would be double subtracting, no?

      • 1 Reply to pulsetsar
      • << I thought the float excluded the shares held by insiders and >5% holders. So deducting the insiders shares (and some of the larger institutions' shares) from the float would be double subtracting, no? >>

        44.6 million shares outstanding


        Mgt: 10.1 mil

        Barclays (ETFs): 2.8 mil

        Greenlight, Marsico, Franklin, Wasatch, Jana, Greenhaven, Vanguard, DE Shaw: 17.3 mil

        (you can debate whether or not these guys are true believers or not but almost all of them were heavy buyers of the stock in 4Q 2005 and/or 1Q 2006)

        Total: 30.2 mil

        % of shares outstanding in "friendly/passive hands" =


        "Actively trading" float = 14.4 million shares

        Short position = 4.675 mil shares

        Short position as % of "actively trading" float =


28.27-0.26(-0.91%)Aug 28 4:08 PMEDT