It's a theory, but it's in all likelihood an inaccurate one. Summit being on the BOD for the prior quarter still has to act within the guidelines for BOD's for the duration of the quarter. Thus, they weren't eligible to sell their remaining 5.4% stake in UBNT until 11/12 (today).
I think the selling of the previous two days was a further accumulation of shares sold short. If Summit does not opt to sell their remaining 4.7 million shares rather quickly (and from the look of today's trading they are not) one could imagine those shorts possibly covering really soon. We'll see.
For the record, I am inclined to think that the chances of any near time new high in UBNT are remote. I believe it's more likely we travel back down to the mid 30's over the next month or so. But that is not what this massive new lone short is banking on. He believes the stock will retreat over the long haul. I will be adding to the other side of that bet.
Not only has this new lone short taken a two million share position over the past month but I estimate he added another million in the wave down between Friday and today. I suspect, however, that his three million share short position is now complete. So, it is game-on from here.
I caution our new lone short to abstain from any desperate measures. Any erroneous press releases, unsubstantiated rumors or other type of foul play can be traced to him with little difficulty.
BTW, knowing that it is just one, sole entity that has sold almost three million UBNT shares short over the past five weeks, I don't expect them to reveal themselves or the position they've taken. Very recent history has taught us that it is quite dangerous to expose your quickly accumulated, oversized short position. Other hedge funds have seized that opportunity to squeeze just for the sake of squeezing. It is a very fashionable and successful new trend. IMO, this situation is ripe for that type of response. If that happens you might expect another surge in the price per UBNT share within a month. Let's see what happens.
Similar to earlier in 2013, a three million share short position has accrued in UBNT over the past month. I don't believe that this is a collection of speculators. Contrarily, I sense that this is one wise guy, hedge fund that has erroneously convinced himself that this company is badly over valued. I also sense that he has stubbornly pressed his bets as the stock has risen over the past few days. I expect the short position to inflate again upon the next (11/15) short status update.
This does not concern me. I've been through this. Most recently with Pandora. As a long term Ubiquiti shareholder, I welcome it. While it may increase volatility over the next month or so and may be hard on short term investors, I feel quite confident that this will be a losing venture for the short. It will turn out to be a great catalyst for a big increase in the valuation of Ubiquiti over the next 6-12 months when the big short realizes his errors and capitulates. May the best man win. :)
It would be quite a shame if it were this Monday because the market will be closed for Veterans Day. :)
As if we needed more cool UBNT news, Ubiquiti Networks will be opening the market one week from Monday in NYC. I imagine some good TV interviews will follow. Combined with the blowout earnings that were released after the market closed today, this could serve as a catalyst for the next rightful move upward in the valuation of the company.
Ubiquiti is growing so incredibly fast. The stock is still vastly under owned and under appreciated. IMO it is the anti-Tesla scenario. I was hoping for a revenue number north of 125 million and got it. Unifi revenue simply exploded upward. I didn't even mind the tepid guidance. It is merely weather related IMO and not indicative of slowing growth. Fantastic report all around.
The reason for the big drop in short interest over the past two weeks is Summit Partners. I've written numerous times on this board that I believed they have been the holders of the huge short interest in UBNT. It was a hedge against their long position that they had restrictions on selling post IPO. This, pretty much, proves my theory. They were covering that big short position as they were selling their longs between 9/1-9/13.