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Exelixis, Inc. Message Board

  • metropath metropath Apr 12, 2013 10:24 AM Flag

    short cover?

    Once PPS hit 5 and above, shorts will have to either cover or add more short position, let us see.

    Sentiment: Strong Buy

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    • "Once PPS hit 5 and above, shorts will have to either cover or add more short position, let us see."

      For years the "shorts will have to cover" scenarios have been tossed back and forth and the short interest has done nothing except increase relentlessly. Even during the run from $4 to $12 in 2010, the short interest kept climbing. I've written off the likelihood of a squeeze occurring. The high short interest is offset by the equally high institutional ownership so I just don't worry about it. If the company succeeds, the stock price goes up, I do not view it as a tug of war between shorts and longs. Someone wins and someone loses, but not because of the actions of the other party. It is nice to see the pps back above $5.

      • 2 Replies to erniewerner
      • I think we have seen the effect of short covering in the past, but normally in conjunction with rumour - such as when the takeout rumour, with GS being retained to lead, was floating a few years back. The effect is volume and contribution to/acceleration of the price appreciation.

        With respect to upcoming ASCO - watching a few stocks over the last 6-7 years - I think we've seen evolving trends there. Initially, there was an insider/outsider information gap when abstracts were released to a select, but large group. There also seemed to be some positive cyclicality for biotechs leading into and throughout ASCO. This changed when abstracts were released generally - although at first the ASCO runup was intact. In recent years, it seems that the runup effect is more and more truncated. At this point, if this runup is coupled with ASCO (companies by now know which abstracts have been selected, but for late breakers), I would expect it to be even more truncated, with only truly exceptional news resulting in run-ups. Based on this theory, I'd expect a run-up pre-ASCO perhaps coinciding/ending with abstract release on May 15. just some thoughts.

        for EXEL - a first clue would be for MM or someone to say, "we expect to have a strong/active showing at ASCO this year"

        Sentiment: Strong Buy

      • well said, erinewerner!

        Sentiment: Strong Buy

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