Let's try to explain this again: If you are short a stock and it runs up suddenly, you do one of two things: (1) You cover, or (2) You double up your short at the higher price and cover later. You do not just sit there. The 20 million or so shares short - probably a good deal more than that now - are not held by the same people who were short months ago. Or even weeks ago. You say you've doubled your money. Actually, I believe you tripled your money and have now lost half your profit.
Great expectations for the MS presentation, followed by the long swoon. Even while the XBI -and most smaller biotechs - were holding up well. If I owned 100,000 shares -as some here apparently do - it would have made me nervous to be down $40,000 before Paulson jumped in at the last minute to save ...who?
6 now. None of which rise to the level of the puerile poo-poo jokes which you post on the IRWD board.
The astonishing thing is that Paulson had to spend $45 million to drive the stock up 20 cents. There must have been sell orders stacked up like planes over O'Hare.
One thing was made abundantly clear by today's action: The short interest here is not in the hands of smallfry, but major players. They had covered in the big market selloff and were looking to reestablish a new entry point. Whoever they are, they're big enough to fight Paulson to a standstill. It's like that scene in King Kong where Fay Wray cowers in the brush while Kong fights the dinosaur. No place here for us chickens.
Would you prefer 5 separate posts? I had predicted to someone here that this would be attacked and sold off today, with those who had been shorting it relentlessly at 7.52 pulling the string and sending the longs into the dunk tank. I was prepared to post a simple "SPLOOSH!" before Paulson showed up. When the stock ran up suddenly shortly before the close, I intuited what was going on and posted. Then, after hours, as the actual trade was posted, I saw that it was much larger and 2 cents higher than I had guessed and posted again. Then I later noticed that the size of the trade exactly matched Paulson's existing stake and posted again. I was not "responding" to myself - I was correcting and amplifying my original post. The absence of many enthusiastic longs today - including yourself - suggests to me that many bailed. If I had a large part of my net worth tied up in this one stock and saw over 6% evaporate in one session, I would have taken some off the table. Then, when it reclaimed half the losses in the last 10 minutes, I would have been angry and felt victimized. Paulson did no one any good - including himself.
Interesting that the shares Paulson bought today exactly match his existing stake. I can see someone coming into his office at 3:45 and saying, "XYZ Hedge Fund is raiding Synergy!" Paulson responds, "Double up!" You can do this if you are rich and stupid. He now owns 11.5% of the company. Watch for the filing.
Incidentally, who says that all these guys are smart? It cost Paulson $45 million to rescue $1.25 million in profit. No wonder his fund lost so much money last year. Anyone here could have traded smarter than that.
This is a great time to reenter. They're making money, paying a nice dividend, and eventually interest rates will have to go up. Unless world financial cataclysm intervenes. In which case, what stock will you buy.
Paulson obviously violated one of Guy Adami's sensible rules, "Never trade angry." He could have bought 100,000 shares or so at the open, which would have suggested that something wonderful had transpired in the presentation. This would have engaged the retail longs and made it more difficult for the raiders. Or he could have stalled it out at 6.80 or so and waited for the retail longs to jump in. Instead he waited until it was down about 40 cents -a loss on his 5.7 million shares of a mere $2.25 million, before throwing in aboutt $45 million to spite another hedge fund. In the end, it resulted in a draw: They went short @ 7.5, he went long @ 7.12, it closes at 7.32. The losers were the many retail longs who got discouraged and bailed on the way to 7.12 and the retail shorts who joined the wolfpack and got squeezed. (Not many of these - the "hard to borrow" notation on the quote tells you that retail shorts are unwelcome.) Everyone paying attention knows exactly what happened. No one thinks that value investors, after watching this swoon all day, suddenly decided that it was oversold @ 7.12, dug in their pockets, and came up with $45 million in spare change. This is like watching two rich guys smash their Bentley's into each other. As I said, let The Big Dogs hunt.
Note: The order just was posted ah: 5.696 m shares @ 7.32. There's still an order for 31,000 shares @ 7.29. The MM's - or whoever was behind the short raid - obviously shorted it back to him or this would have gone much higher.
This was fascinating to watch. The MM's spiked this on very light volume Monday. They didn't even buy the shares, just some cheap 8 calls, but that was enough to take it up above 7.50, where they shorted it all week, holding it there with the help of the expectations of many for today's MS presentation and an occasional gentle nudge. Then, all it took to get it rolling downhill today was a little nudge in the other direction. I saw no sign of covering and expected it to close at 7. Then, just before the close, someone came in and bought a million shares @ 7.30, then kept piling in more orders. Note that at 3:30, only 1.5 m shares had traded. By the close, the volume was 8.5m shares. Looks to me like they made John Paulson mad. Gold was up today, so he was probably feeling feisty. Let The Big Dogs hunt.
To quote Ralph Cramden: "Pins and needles, needles and pins; it's a happy man who grins!"
I think that the prospect of continued very low interest rates is more important to this company than the short term drop in crude prices. Given that the Fed's inaction avoids further strengthening of the dollar, I also think that this is good for commodities.
Well, with all due respect to your infallibility, it doesn't look like Gary's presentation blew anyone away.
PS I'm flattered that you went to the trouble of creating a tribute id. But I wonder why? Something wrong with your regular id(s)?
Indiansfan407 buys the rose colored Windex they sell at Progressive Field. You spray it on your windows at evening while repeating," Red sky at night, sailor's delight!" Yep, everything's coming up roses! Y.
I now realize that this is a repost of a portion the piece entitled "5 healthcare stocks under $10 ready to pop". It's worth noting that their #1 pick was Rite Aid. It dropped 11% today. I know - because I own a lot of it. Fortunately, my basis is around $3, and my philosophy for holding it is unchanged: All they have to do is stay in business and eventually either Walgreen's or CVS has to buy them.