So how is it SGEN show 108% institutional ownership?
(Mutual fund and Institutional owners actually.) This obviously cannot mean what I think it means? Both Yahoo and my broker list IO at 108%.
I have not run into this before. I assume it is an incorrect number?
Not likely a wrong number.
SGEN has a minimal float and a substantial short position so it is very likely that a bunch of the shares that are shorted are actually synthetic.
If you don't know, one way of shorting when there aren't enough shares to borrow is to sell Calls which then forces the MM to sell shares for balance. Technically the MM can naked short for 3 days only but given the SEC's lack of means or will to enforce the rules there surely are several ways at the MM disposition to dance around the limitations.
That IO is 108% most likely means that the same institutions that hold most of SGEN real shares are buyers of the Calls sold by the shorters.
What that means really is that with the approaching milestones in the various SGEN ongoing trials, there is a simmering tinderbox for the shorts in the very real and likely event that trial results are positive. The very fact that since the new year SGEN share price rallied up to $ 39+ on high volume, slowly dropped to $33 on low volume during the June market correction and then was hit hard if briefly to below $28 on the tail of the Lugano BS story and promptly popped right back to the $39 area on relatively high volume is indicative of the shorts getting very nervous and covering before much higher prices.
At this point there would have to be a substantial failure in one of the most principal tials for the remaining shorts to break even. The facts on the ground do not support the shorts thesis and the more times goes by without negative news the more likely it is that the final results will be successful.
Also notable that Mr. short himself, anal-ist "we'll keep on downgrading" George Farmer has been conspicuosly silent for a long stretch.
Wrong, wrong wrong on the options. You should look at the open interest on all the calls and the open interest in the puts. What it will show you is that the open interest in the long calls ( someone sold them) and the long puts ( someone bought them) is negligible as to a showing of the short interest. The options are thin and sometimes they do a spread by doing calls and puts at the same time. The only thing explaining the short interest is going 'short against the box'.