WSJ reports short interest in LSCP increased 23% from 3.6+ million shares to 4.4+ million shares for the month ending March 15. It would take 9 days to cover at average volume, which a moderate time frame compared to other Nasdaq names.
Frankly I'm suprised at the large increase at these low levels, but shorts increased 7% overall last month in Nasdaq focused largely in technology issues. Looks like the big hedge funds are the culprits. Non dividend payers are their favorites so there is no cost of carry.
Tex, with all these shorts out, with lots of bearish talk by technicians and with the enormous amount of liqudity and money on the sidelines, do you think this is a good time to be bearish?
4. Still building on the premise. If you were willing to short long term, get invested enough early to force the initial trend, the guts to continue to drive it (especially after large gains have been realized) until that significant event occurred, then be able to completely get yourself out early enough to not care about a few dollars here and there as you liquidated your position completely (leaving the followers to take the big losses)...could you not actually 'short' 'long'?
5. If this is even plausible would it not mean that the downtrend in the stock would baffle the fundamentalists, and technicians alike? Especially if the company is increasingly growing and gaining market share with, really, no significant competition? IF so, the drop is irrational, yet not to some, would not the effect ultimately be that the artificial drop is just that...an artificial drop that, once eliminated, would allow the stock to proceed in a normal environment and valuate as expected by those who take more than a passing interest at valuations? And would this return to normalcy not happen very quickly once begun?
Sorry if none of this even seems plausible, or is silly but I honestly wonder. I've seen too many folks on both sides of this one throwing their virtual hands in the air in displays of 'I don't get it'. Even if I'm way out in left field here, I do find it interesting that very, very little discussion of the impact (short and long) of the huge short interest on the stock of a company in continual growth mode has not occurred. I don't see signs of the impending collapse (I don't think it's there). The impetus for this belief in the impending failure of LSCP by the shorts is just weird, IMHO, and I'm quite interested in what others think of about it...especially those who've been investing for decades or are excellent TA folks.
My position in LSCP is at the level I wanted it to be (% portfolio), I got in early and am comfortably in the black, but this is looking more and more like a time to begin accumulating more if the pressure down cannot be sustained. I�m looking years out here, not months.
Hope thoughtful replies are possible.
I think being an "early" shorter is the wrong place to be. I'd want to have been the "last" shorter - the guy who shorted at $43 instead of the guy who shorted at $22. I don't think your scenario is plausible.
Unless someone (or a group of someones) is able to make "naked" shorts on LSCP, then someone actually has placed an $80 milion bet that LSCP is going lower than $20. And if the other poster is correct about the growth in the past month, someone has added another $15 million to the bet. That is confusing and confounding to longs as well as TA practicioners. We ( I include myself) see nothing but roses in LSCP's future. It seems completley out of the question to short this stock.
I don't have $95 million to bet and I wouldn't even bet $10,000 that LSCP will go lower than $20.Yet somebody has. That kind of commitment strongly suggests to me that they know something that I don't. Thats why I'm currently on the sidelines on LSCP. Its kinda like standing there with a $3 side bet against the shooter when he's got $10,000 riding on his roll. I always have to wonder if he doesn't know the dice are loaded?
I know only what I have learned thru my own DD and whatever I have picked up here. On the contrary, I feel that all the bad news about LSCP is out there and I don't think it will ever be (substantially) lower than $20. I also think all of the good news is also there and that it is currently fairly priced. It is competitive with a bank CD right now. ($1 earnings on a $20 price). I think it will grow in price and earnings over time and this is a good time be getting in or adding. I think shorts who remain will be the losers.
But they have $95 million to bet and I don't. Do your own DD.
Some of what you said is what I had thought earlier. A fund is long and then shorts the stock that they are long in rallies in essence selling the stock neutralizing their position. Then once bad news hits they dump the long position not caring about the stock price because their position is neutral, so basically allowed to short on the down tick. The only thing that doesn't make sense about it is wasting buying power to do this. However, it appears to be effective due to the volatility of this stock compared to others.
I also know some spread traders in equities that use huge margin positions and making money on the difference in the two stock prices. An example of this is buying YHOO and shorting GOOG when YHOO's earnings are bad. That is one of the reasons why other stocks in the peer group move in the same direction. There are many other reasons too, that is just one. They often look for stocks in the S&P 500 that are highly correlated HD and LOW.
Astro, et al,
I hope folks will bear with me on this as it will require two posts.
I do not yet see that reported on the NASDAQ short page yet, but will take your word on it for now.
More importantly, if any care to comment. I do recall a very unpopular poster about a year ago warning us all of an impending effort to bring LSCP down by a group of folks who were identified as by this poster as professionals. Not subscribing to a conspiracy theory, but never having been this close to a stock with such a large short interest despite such strong company growth and potential (with nothing indicating a fundamental change), I wonder what other, more experienced folks might think of this...in terms of the near and far term.
1. Obviously longs, but sometimes shorts or fence-sitters have indicated that they don't really understand the movement of LSCP in the past year or more. Indeed, some of the best TA folks that have been seen on this board have been baffled or surprised with the movement. Obviously, folks are missing something...except, one could argue, the shorts. But even that doesn't make sense since nothing approaching terrible or 'company busting' has appeared in either the fundamentals or an isolated incident. The first pullback (to $15 and change) began when earnings were 'only met'. Since then some misses but nothing I would consider major.
2. Like any consortium, the power of people working in concert can be significant. Even a small group, with influence, can cause dramatic changes in almost any environment...for a time. That said, even a small group of shorters working together with enough leverage could, I think, influence thinking on a stock...any stock. With good timing, other unassociated but similarly disposed folks could magnify the effect of the initial group unknowingly. Does anyone believe this might be happening in any measure here?
3. If #2 has any merit, could a group with enough clout search and find the conditions of a company like LSCP a good fit for such a strategy? If yes, would it not take some pretty significant counter-momentum to change the course? I would argue LSCP would not have had anything of enough significance, conceivably anyway, to do this in the past year.
Im not an expert, allthough looking back at June 2005 just before lscp ran to 43, there were just as many shorts then as there are now. I believe thats why laserscope moves in gaps, because of the shorts. Also its easier to triple your quarter when theres only a few units sold, but now with revenues so high, I really believe that a 20-25% increase at these levels, from quarter to quarter is fantastic. Any decent or good news this stock can move back to mid 30's based on the shorts. Either way, a great technology, with a super potential for new ground breaking technologies. Just my opinion.