PJC in big financial trouble because short LDK, look into detail
[SNIP]... April 3, 2008
09:38 EDT LDK theflyonthewall.com: Recommendations story about LDK from Piper Jaffray Piper is making a positive call on the Solar names saying they have heard Spain has raised solar subsidies and output requirements. The firm said this is a positive for YGE, STP, SPWR, JASO, and FSLR. They continue to recommend shorting LDK. Note that Spain is the world's second-largest solar market. :theflyonthewall
April 2nd closing price - $30.09 April 4th closing price - $36.40
$6.31 = 20.97%
FSLR PE/PS ration is about 5X higher than LDK, and LDK will have growth over 100% between on and end of 2009.
Typical investment hedge strategy is long undervalued stock like LDK and short overvalued stock in the same section like FSLR. PJC did exact opposite way because they already have big LDK short position under water. They have trouble to cover it now. Be careful if you own PJC shares or any mutual funds.
Did they recently close their massive short postion under water on LDK? What were the losses? Are they going to hold it against LDK because they performed so well? Again many questions here PJC fully disclose and let you stock tank immediately please.
Exactly, seems like some other big guys have loaded large amount of shares of LDK. They have been bidding up LDK last few weeks. PJC's short position is on fire.
If people start taking out money from PJC managed funds due to poor performance, PJC will be in big trouble like BSC. JPM wanted to buy BSC because BSC is much bigger. I am not sure if anyone else is interested in PJC if PJC collapse.
No wonder LDK has about 11 million short shares. Keep in mind that's about over 50% of floating share. I believe there are some amount are naked shorted shares, which require to cover by law in certain business days.