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  • per_a.jacobsen per_a.jacobsen Jul 18, 2013 12:42 AM Flag

    Interesting development in short interest


    Immediately before the company took a step forward with the locking in of the new revolver, the short interest went up... way up.

    As of 6/28/2013 short interest was 237,004, up from 136,891 on 6/14/2013, and up from 29,442 on 5/31/2013.

    I have no idea what this means in view of the revolver. Perhaps nothing.

    The first jump in short interest occurred some time after the complication with with DirecTV in the middle of May and during the time period where forbearance agreements were being put in place. The second jump occurred in the period after the law suits were locked down.

    During the period the per share price dropped as follows:

    Jun 24, 2013 1.29
    Jun 17, 2013 1.30
    Jun 10, 2013 1.71
    Jun 3, 2013 1.85

    Now, of course, the per share price is sharply up, at $1.75, or so. Does this mean that whoever joined the short party between 6/14 and 6/28 (100 thousand positions, or so) are $0.45 under water and that the other 100 thousand positions, or so, just on the edge of breaking even? If so, what is going to happen if we return to $2 -- after all 230 thousand positions needs to be covered, which amounts to 3 1/2 days cover at average (or 60 days at today's volume?)

    Certainly interesting. Perhaps the gamble is simply that the restatement will drop the per share price towards 0 rather than increase it.

    We will see, I guess.



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    • All,

      I wrote this posting yesterday. Today Unitek Global Services announced a new forbearance agreement, which may or may not also count as a refinancing. The market appears to have reacted positively, with the per share price up 10% in early morning trading.

      This would mean that the entire 230 thousand, or so, short positions, would now be hopelessly under water and only a slip in the run up would cause the short holders to recover.

      At this stage a slip is hard to imagine (well, not really, of course, with imagination being endless.... I mean a slip is hard to imagine all else being equal,) and so it is possible that we will not sink below the $1.85 mark again.

      This would then, I guess, force the short position holders to cover, pushing all the short positions on the market. Will that drive down the price?