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J. C. Penney Company, Inc. Message Board

  • rubus_x rubus_x Apr 25, 2014 3:00 PM Flag

    Short interest up or down during the 20% shaving from 9 to 7.

    Look like we'll find out after the close today. If short interest goes up then shorters contributed to the drop in share price. If short interest goes down then it was longs dumping. Or it could be combination of both. Anybody care to guess? I'm guessing it was both.

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    • Shorting stock effectively increases the number of outstanding shares. If there are 305 million shares of JCP outstanding, and an additional 93 million shares are short, there are a total of 398 million shares owned by longs. So shorting a stock effectively increases the number of shares on the market. If the short shares increase to 120 million, a total of 425 million shares must be held long.

      So as the number of shares shorted increases, the intersection of the supply-demand curve for the stock shifts to a lower price assuming all other conditions remain unchanged. So short selling unquestionably depresses the stock price. If negative news comes out in addition to an increase in short selling, the short selling increased the move downward in the stock price beyond what it would be with only the effect of the negative news.

      Realizing that some longs actually hold stock issued by shorts and not the stock issued by the company, do those longs have a right to vote the stock at the stockholders meeting? Right now, unless they deny voting rights to stockholders that have lent their stock to short sellers, JCP could conceivably receive about 400 million common share votes at the annual meeting although they've issued only 305 million shares. What sense does that make? This would make a great class action lawsuit.

    • That's today? I hadn't heard of this happening today. I would think this information wouldn't be available until after April 30th.

    • I have news for you. The shorts from the $20s and teens are not going to cover. When (not if) JCPQ goes CH 11, they wont have to. Total victory. Those that continue to slurp media/company koolaid had best be prepared to lose it all.

      Sentiment: Strong Sell

9.89-0.08(-0.80%)Aug 26 4:02 PMEDT