Post by joeypotsandpans on May 13, 2015 17:40:00 GMT -5
In the balance sheet thread I wrote about the diminishing returns with regards to the shorts, by request from another member of the board I am doing a separate thread regarding their returns on their continued exhaustive efforts. (If mods want to combine that's fine but the member that suggested a separate thread felt like a lot of the old timers would miss it in the other thread due to various factors if that makes sense).
Lets take a closer look at the law of diminishing returns with respect to the short selling of shares in MNKD
generally speaking the idea is that if one factor of production in this case we'll use shares borrowed to produce sales of of those same shares into the market to apply pressure on share price.... is increased while other factors (float available and long holdings for example) are held constant, the output per unit of the variable factor (shares sold short into the market) will eventually diminish.
Although the marginal productivity of the shares sold short decreases as output increases, diminishing returns do not mean negative returns until (in this example) the demand for those shares exceeds the shares available. In everyday experience, this law is expressed as "the gain is not worth the pain."
So while on the surface some of the weaker longs have said the "pain is not worth the gain" the stronger hands wait out for the shorts to finally realize "there will be no gain, but insurmountable pain" as they acknowledge the diminishing returns of their efforts.
I had a fellow long call me this am. and the light bulb went on...he said "for every million shares they sell into the market they may be able to knock it down .15 but for every million shares they want to buy back they may send it .50 higher". That is exactly what you witnessed last friday on the bear raid, it took quite a bit of fire power (selling) of the first 9 million shares of volume to knock it to the lows, but minimal amount of buying power to have it accelerate right back to unchanged. Think about the amount of bashing (articles, tweets, media spots) that took place the day before and then the new members sprinkled with some questionable characters (quasi long time members) during the shoutbox and this is what they ended up with....not good enough for them, so they have to get the supporting downgrades afterwards to try and help, but really it is at this point mustering diminishing returns.
Lets take a look at today's action: during trading hours today...it's as if the longs are in Nepal assessing the damage of the past few days rumblings and volume is light would be an understatement 3.2 mill as I write this post close. With that in mind lets take a look at the following: (Liane you might want to skip this part as I know you mentioned you don't take days to cover to heart) but it is important when keeping it in the context of what I just wrote about with respect to the diminishing returns. With the last report on SI:
4/30/2015 100,934,186 4,967,815 20.317622
at about double the volume of today, the "days to cover" stood at 20.31, well if you took today's volume we would be at close to 33 "days to cover". If no (significant) shares are added to the existing float, and with long time strong hungry hands holding...that does mean a lot to me
So again, at this point after IMO what must seem like quite a few humiliating months (at least since prior to Adcom)....Kliff, AF, et al. look to me as that saying goes..."oh what tangled webs we weave"....good luck getting it "untangled" boys
Lets take a closer look at the law of diminishing returns with respect to the short selling of shares in MNKD
generally speaking the idea is that if one factor of production in this case we'll use shares borrowed to produce sales of of those same shares into the market to apply pressure on share price.... is increased while other factors (float available and long holdings for example) are held constant, the output per unit of the variable factor (shares sold short into the market) will eventually diminish.
Although the marginal productivity of the shares sold short decreases as output increases, diminishing returns do not mean negative returns until (in this example) the demand for those shares exceeds the shares available. In everyday experience, this law is expressed as "the gain is not worth the pain."
So while on the surface some of the weaker longs have said the "pain is not worth the gain" the stronger hands wait out for the shorts to finally realize "there will be no gain, but insurmountable pain" as they acknowledge the diminishing returns of their efforts.
I had a fellow long call me this am. and the light bulb went on...he said "for every million shares they sell into the market they may be able to knock it down .15 but for every million shares they want to buy back they may send it .50 higher". That is exactly what you witnessed last friday on the bear raid, it took quite a bit of fire power (selling) of the first 9 million shares of volume to knock it to the lows, but minimal amount of buying power to have it accelerate right back to unchanged. Think about the amount of bashing (articles, tweets, media spots) that took place the day before and then the new members sprinkled with some questionable characters (quasi long time members) during the shoutbox and this is what they ended up with....not good enough for them, so they have to get the supporting downgrades afterwards to try and help, but really it is at this point mustering diminishing returns.
Lets take a look at today's action: during trading hours today...it's as if the longs are in Nepal assessing the damage of the past few days rumblings and volume is light would be an understatement 3.2 mill as I write this post close. With that in mind lets take a look at the following: (Liane you might want to skip this part as I know you mentioned you don't take days to cover to heart) but it is important when keeping it in the context of what I just wrote about with respect to the diminishing returns. With the last report on SI:
4/30/2015 100,934,186 4,967,815 20.317622
at about double the volume of today, the "days to cover" stood at 20.31, well if you took today's volume we would be at close to 33 "days to cover". If no (significant) shares are added to the existing float, and with long time strong hungry hands holding...that does mean a lot to me
So again, at this point after IMO what must seem like quite a few humiliating months (at least since prior to Adcom)....Kliff, AF, et al. look to me as that saying goes..."oh what tangled webs we weave"....good luck getting it "untangled" boys
