|
|
Post by jpg on Jul 12, 2014 18:32:14 GMT -5
When do failures to deliver become meaningful and actionable? MNKD seems high on the list without triggering anything? I wonder if this couldn't be a meaningful way of tracking when 'the game is up' for short traders? Theoretically that would be the time for long traders to pile in no? I am far from being knowledgeable on this topic but would appreciate input by more market savvy individuals on this topic.
JPG
|
|
|
|
Post by mrhaigs on Jul 12, 2014 21:52:34 GMT -5
When do failures to deliver become meaningful and actionable? MNKD seems high on the list without triggering anything? I wonder if this couldn't be a meaningful way of tracking when 'the game is up' for short traders? Theoretically that would be the time for long traders to pile in no? I am far from being knowledgeable on this topic but would appreciate input by more market savvy individuals on this topic. JPG Whatey? |
|
|
|
Post by rak5555 on Jul 13, 2014 9:51:50 GMT -5
Here is an excellent site for learning more about failure to deliver, reg sho, and threshold lists: www.sec.gov/spotlight/keyregshoissues.htm
I do not see mnkd on the threshold list, but if it does show up, it could be a strong buy signal due to fact that brokers have 13 days w/in which to cover all naked shorts. |
|
|
|
Post by lyric14882 on Jul 14, 2014 18:41:58 GMT -5
I am not really all that sure of the implications, but it is my understanding a failure to deliver is a bad thing for the stock itself. I thought it in a way like bankruptcy, where that some people just don't get paid by the person filing bankruptcy. Maybe I am really wrong though  From Investopedia: Investopedia explains 'Failure To Deliver' Whenever a trade is made, both parties in the transaction will have to transfer the cash and assets before the settlement date. Subsequently, if the transaction is not settled, one side of the transaction has failed to deliver. Failure to deliver also can occur if there is a technical problem in the settlement process carried out by the respective clearing house. For forward contracts, a party with the short position's failure to deliver can cause significant problems for the party with the long position, because these contracts often involve significant volumes of commodities that are pertinent to long position's business operations. Failure to deliver is also important when discussing naked short selling. When naked short selling occurs an individual agrees to sell a stock that they neither own nor have borrowed. Subsequently, the failure to deliver creates what are called "phantom shares" in the market which may dilute the price of the underlying stock. |
|
|
|
Post by BD on Jul 14, 2014 18:59:24 GMT -5
lyric: naked short-selling (NSS), the tactic that results in failures-to-deliver, has a long history of being used against companies that are already in a death spiral... if the company goes out of business and/or gets delisted, the shares never have to be delivered. If you know (for whatever reason) that a company is a pump & dump or some other type of scam, and you can NSS it, then it's like free money. I've had the unfortunate experience of investing in a company like that, where the cretins running the company were themselves complicit with the NSS-ing, and able to profit from it on the backs of many loyal (albeit naive) investors. This relationship between NSS and a company going under may be what you've heard about, and why you associate NSS-ing with bankruptcy. But that's not always the case. One of the most vocal opponents to NSS is Patrick Byrne, Overstock's CEO, who became aware of the tactic being used against his own company and became quite the anti-NSS campaigner. NSS came into existence as a result of loopholes in FINRA rules being exploited in ways the original framers of those rules never imagined. In my mind, the situation is similar to the way in which high-frequency trading exploits rules that were designed to facilitate fair and equitable markets, resulting in markets that have become anything but. It's a challenging landscape we frolic in, as contemporary investors and traders... and definitely requires intestinal fortitude and chutzpah to eke out profits. At least it's still possible  |
|
|
|
Post by jpg on Jul 15, 2014 1:25:15 GMT -5
My thinking on the importance of failure to deliver as it applies to Mannkind is simple (and maybe simplest and irrelevant...)
-The short portion of the available/ traded float makes the short interest much higher then the already high short interest would suggest.
- Mannkind has an option to recall 10 million shares (or something to that effect) at a certain price (around 13$ for a certain number of days again if I recall correctly)
- the shares seem hard to borrow and therefor people are getting paid significant interest to lend their shares it seems.
- naked short selling, for the purpose of market manipulation (not certain how this is defined or enforced?) is theoretically not allowed but possibly or probably some are still doing it. I think HFT would be difficult or impossible to do without the possibility to naked short sell. HFT usually close their positions quickly so it doesn't show up. A few weeks ago (can't find exactly when it happened) Mannkind briefly became a threshold stock at around the time of FDA approval if I recall. Why did that happen?
If I am right a good partnership with a sustained price rise price would cause failures to deliver to spike big time. This would be the signal (as well as rising share price obviously) of short selling capitulation and possibly the time to buy. Basically follow the failures to deliver list and when Mannkind stays on in for a few days: buy buy buy? Could any savvy traders explain to me the error in this logic? It sound to simple so there must be an error?
JPG
|
|
|
|
Post by liane on Jul 15, 2014 4:10:39 GMT -5
Early last week, it was going around on YMB that if MNKD could maintain a closing price at or above $10.20 for 20 out of 30 consecutive days, they could redeem some convertible bonds. As of yesterday, with a closing under 10.20, they have lost the opportunity for now. We're essentially starting the count over as we've been below 10.20 10 out of the past 11 days. Very curious isn't it.
|
|
|
|
Post by rak5555 on Jul 15, 2014 8:25:32 GMT -5
Liane - the same thing crossed my mind as it was occurring and I dismissed as too much conspiracy influence from Spiro. It saddens me to think that the share price would be that easy to manipulate.
|
|
|
|
Post by liane on Jul 15, 2014 8:28:08 GMT -5
What do you bet it closes over $10.20 today?
|
|
|
|
Post by mannmade on Jul 15, 2014 15:57:28 GMT -5
How about tomorrow instead? |
|
|
|
Post by liane on Jul 15, 2014 19:45:08 GMT -5
Yeah, maybe tomorrow - Ms Yellen put a wet blanket on the tech sector today - the nerve!
|
|
|
|
Post by mannmade on Jul 15, 2014 20:00:16 GMT -5
Yes I was actually wondering how responsible that was... Not exactly her area of expertise and to lump mannkind (my personal interest obviously) and a few others in with everything else seems a bit irresponsible on her part... And certainly cost some people money...
|
|
|
|
Post by 4allthemarbles on Jul 15, 2014 21:19:42 GMT -5
Thanks Janet...
|
|
|
|
Post by ezrasfund on Jul 16, 2014 8:43:30 GMT -5
If you remember when Greenspan coined the term "irrational exuberance" in 1996, the Nasdaq continued on a pretty good run till 2000.
|
|
|
|
Post by mannmade on Jul 16, 2014 11:22:54 GMT -5
Yes and I would have accepted that over singling out two sectors... biotech and technology over the rest of the economy...
|
|
