Geezee, these shorts are stupid. They had the chance to cover at 11.65 and did not take it.
Short at 12/31 settlement (12/26 trade date) = 54.5 million vs 37.5 million at 12/13 settlement.
Let's see, 12/24 close was 13.13. 12/26 close was 13.22. Good choice, shorts. Just keep it commin.
It will be a wonderful day (week) for longs when the realization sets in. Oh, BTW, shorts, 22 cents will go ex div near the end of Feb. Cover or pay. That's the way it is.
Hey, longs, hang tight. 13.22 on 12/26 to 14.18 today = 7.26% increase. Way underwater shorts are longs best friends. It's only a matter of time to capitulation which = a lot of buyers to increase the price. A panic, if it comes, could mean a monster squeeze.
Shorts are doomed, shoveling sand against an incoming tide. Hahahaha. Love to watch the stops get triggered.
imo, the shorting will continue until the options action changes. still very large open interest calls out there in short term months (jan and march particularly). this is the (partial) hedge. and its going to be a very important indicator for nrf's short term stock price. over the next 2 weeks as the jan calls expire next friday, the most important thing to watch is are those calls used for stock (to cover), profits, or are they rolled out to a later month. if they are rolled out i strongly suspect the current shorting and price action will continue as is.
like you i'm way beyond the point of understanding the "why" of the shorts...but i think the "how" is our best guess at predicting future short term movement.
There are 36,670 Jan in the money calls outstanding. If all the long side is held by shorts, then 3.667 million shares can be covered at strike prices up to 14. Feb (expiring before earnings and ex div) has 5.994 in the money.
March has 41,175 contracts outstanding at strikes of 14 and under covering 4.12 million shares. March expires after earnings and ex 22 cents (market probably uses 21 cents).
Interesting is 20,729 March 15s outstanding. If all held by shorts, then their max pain is 15 plus the premium plus 22 cents. I hope these options get exercised. I won't care that shorts limited their loss on 2.07 million because the price is over 15 ex div, which is fine & dandy with me.
If all in the money through march get exercised, that's 8.39 million which is 15.4% of 54.5 million short at 12/31 settlement. If the price goes over 15, add another 2.07 million. At over 15, maybe 10.5 million short shares have limited losses. That still leaves 44 million with unlimited loss exposure. Nice.
Hmmmm, was thinking about increase in short interest vs issuance of new shares. With more shares outstanding, the more opportunity to borrow and sell short. Decided to look at some relatives to see whether increase in short shares was proportionate to increase in shares outstanding. It wasn't.
Before the December offering there were about 249 million shares and units outstanding. They issued 57.5 million new shares. So the issuance was 23.1% of prior outstanding. Short interest was about 37.5 million just before the offering and it increased by 17 million or 45.3% of the prior short position.
Another way to look at it: Short was 37.5 on 249, or 15.1% before offering. Now it's 54.5 on 306.5 or 17.8%.
Nope, the increase in short position is NOT proportionate to the increase in shares outstanding. It greatly exceeds relatives to outstanding common and units. This says to me the shorts do NOT believe the growth and spin path will lead to higher per share prices (combined prices, post-spin). Why is beyond me. I just can't fathom somebody looking at the last 7 quarters of facts, the steady increases in dividends and the steady increases in stock price and come to a negative (short is smart) conclusion.
Fine with me: short loss = long profit
The percentage has gone up, but I think the key lies in how many of the offering shares went to shorts, or, rather, became shorts -- there are plenty of them to cover the outstanding short shares. Someone who participated in the offering at $11.65 may have shorted against the box with those shares around $14 to "lock in" the profit. If it goes down, they cover the short naturally and get to keep the $11.65 shares. If it goes up, they "cover" with their shares from the offering and still make a nice profit.
If they really are new shorts who don't have such a hedge in place, God help them. I've thought about why someone might be short, too, and I only have three theories: (1) there is no actual human involved; some algorithm sees a large increase and automatically goes short without human intervention. (Stupid programming.) (2) The above scenario, with someone shorting against the box. (3) Programmatic (as opposed to programmed) trading: the institution is short the sector, believing that they will win on average, and not wanting to violate their short-the-sector plan (stupid stubbornness?) by picking and choosing among the individual stocks in the sector.
Dividend Monkey must have a lot of followers. As I recall, he was shorting this at about $8. He said he covered, but that does not mean anything.
At the end of the day, we have 54 million short and it's possible that on average these are underwater by over $4. Do funds have to report short positions in something like a S-13 filing? I'd like to know what funds are making this kind of bet -- this is not a small amount.