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InterDigital, Inc. Message Board

  • lindmeritage lindmeritage Nov 19, 2011 4:24 PM Flag

    Time to debunk yet another IDCC faithful myth.

    Myth: There is a large short position in IDCC that has to cover.

    Ever heard of convertible arbitrage? No? http://en.wikipedia.org/wiki/Convertible_arbitrage

    A big chunk of IDCC's short position is nothing more than a hedge against the IDCC convert. In a deal scenario the convert would be converted, the arbs. would end up "short against the box" (long and short identical securities), and their positions (long and short) would simply be cancelled with no market impact.

    I realize that this goes over the heads of the IDCC faithful, but hey, there's a reason some of us make money doing this and some of us don't.

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    • Yes - hedging with a short position against a convertible is standard practice. So what? I haven't seen anyone pumping the potential of a short squeeze. This is not a situation that will benefit from a short-squeeze.

      If there is a buyout, the shorts will get caught but they will not push the price above the buyout price. They will simply cover their position slightly below the buyout price.

      If there is no buyout, the price will drop and the shorts will either cover and take their profit or hang in depending how they view the stock price going forward.

      As usual, you use a non-event to try and make yourself look smart. And as usual, you end up looking stupid!

    • We have no proof that you are making money trading IDCC.
      I certainly wish everyone make money with IDCC, even you.

      I will make my money one way, you make it your way.

      One difference between us is that I don't tell people 24/7 that their choices are a POS. My way of trying to make money does not include that.

      OTOH I don't pump IDCC. I made a choice and I will live with its consequences.

      I assume you have heard the expression "short squeeze". Following your logic that should not exist since all short positions are a hedge against long positions.

      From what I have read there are also 90,000 call contracts (equivalent to 9 millon shares)for December & January. Are there also 90,000 hedge contracts against this?

      There are a lot of bets that this deal will happen....

    • What would we do without this guy? And what is he going to do when this message board is gone?

 
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