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Post by gomnkd on Apr 12, 2015 18:10:36 GMT -5
I was trying to find if increase in short position has been profitable to short sellers. Attachment DeletedFor each additional short position opened, I computed the profits for the incremental shorts based on settlement price and today's closing price. It comes to $64MM. these are all approx numbers as I'm assuming that the entire shorting happened on settlement date. Some positions have been closed. It is hard to compute the profit as we know the closing price, but not the price they shorted. Attachment DeletedIt is possible that the closing prices of 10.96 & 7.37 have been at a loss. Overall the shorts are sitting on a profit for what they've added/closed over last year. This pic below shows that shorts have been constantly adding to their position over long term. Higher stock prices have coincided with increases in short position. Attachment DeletedThey are not some dumb guys. I've to agree that their actions have kept a lid on stock. Any jump in price has been met with more active shorting. |
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Post by Deleted on Apr 12, 2015 18:22:11 GMT -5
I started computing this last Friday. Based on avg share price between the high and low of the period, since Jan 1, shares shorted have increased 20,000,000. This corresponds to an average share price of $6.35, so those shares made about $21 mil, but at 30% interest annualized paid about half that profit to borrow.
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Post by Deleted on Apr 12, 2015 19:20:14 GMT -5
I started computing this last Friday. Based on avg share price between the high and low of the period, since Jan 1, shares shorted have increased 20,000,000. This corresponds to an average share price of $6.35, so those shares made about $21 mil, but at 30% interest annualized paid about half that profit to borrow. Not 100% of the shares shorted are borrowed at that interest rate. Shares held in regular brokerage accounts will be loaned by the brokerages at a smaller rate may be? as they dont pay the longs like Fidelity / Schwab does? |
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Post by dejude42 on Apr 12, 2015 21:56:05 GMT -5
Maybe you will find this interesting from Shaffer's trading board
What's Behind the MannKind Corporation (MNKD) Call Buying?
MannKind Corporation (MNKD) has gotten demolished in recent months
by Alex Eppstein 4/10/2015 10:49 AM
Keywords: MNKD
MannKind Corporation (NASDAQ:MNKD) is generating negative buzz this morning, as traders fret over recent news that top executives are dumping shares. At last check, though, MNKD was up 0.2% at $5.26 -- potentially good news for recent call buyers.
Specifically, during the last 10 days at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), speculators have bought to open nearly 17 calls for every put. The resultant call/put volume ratio of 16.91 ranks in the 97th percentile of its annual range.
However, it's possible these call buyers are short sellers in disguise. With nearly 35% of MNKD's float sold short, shorts may be hedging their bearish positions with long calls, in the event of an unexpected rally.
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Post by jpg on Apr 13, 2015 0:30:41 GMT -5
I was trying to find if increase in short position has been profitable to short sellers. They are not some dumb guys. I've to agree that their actions have kept a lid on stock. Any jump in price has been met with more active shorting. Ho gomnkd, This is another example of where I think complex calculations can misdirect thinking and back of the envelop math might do as well. Take a stock at a high price and increase short share selling as the price goes down and yes those selling short shares will make money. Its a relatively simple rule of 3 relationship. Take a share price that goes up and short position going up and you get the opposite effect. I am not hearing anyone saying the shorts are dumb. On YMB maybe but a lot of other strange things are said there... One thing I think I can say is that there seems to be some pretty lowball tactics being used by some for a lot of things concerning Afrezza and MNKD. Then again it has always been a lot easier to destroy then to build. Unless something dramatic happens short term (and it can as this is Mannkind!) the real medium term decider is will there be meaningful and growing sales 6 months or so after launch. If so the shorts were not so smart. If not the shorts were smart. I do feel the pain of the holders of time sensitive synthetic financial instruments. MM are the only ones who really wins with those I think? Do you really think Blackrock took 5% simply to let themselves get ripped off by shorts? They are as smart and have easily the same financial resources and access to the same information. When they take a 5% stake in a company like Mannkind they know it is very likely a 'non reversible investment'. If you do not agree I would be more then happy to understand why. I also have difficulty understanding: " I've to agree that their actions have kept a lid on stock". I maybe simply don't understand what you are saying but it almost sound as if you have difficulty agreeing with that statement or that what you just said might be controversial? That how shorts work. They use their shorts to maximize price drops to get the most $ out of them. Just to be clear nothing I am saying above is said out of anger or as a personal attack (gomnkd knows that I am rather certain). |
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Post by Deleted on Apr 13, 2015 7:51:25 GMT -5
They are not some dumb guys. I've to agree that their actions have kept a lid on stock. Any jump in price has been met with more active shorting. The shorting of MNKD is so extreme and it is such a crowded trade as to leave me to believe that the normal shorting for profit alone is not the primary motive. It is instead the virtual destruction on the company and elimination of its products. Now who would benefit most if MNKD and Afrezza simply evaporated? |
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Post by spiro on Apr 13, 2015 8:33:26 GMT -5
It's obvious that a few shorts may be making some money with their rather risky trading in MNKD. But for most of them, their loses have been piling up with huge interest payments and most of their hedges, losing money or expiring worthless. each month. The big enemy for the shorts is time. This is why the lying GS is trying so hard to get MNKD below $3. So here is Spiro's big question, Who would Al Mann invite to lunch, the shorts or Vanguard, Fidelity or Blackrock?
Spiro here
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Post by jpg on Apr 13, 2015 8:58:40 GMT -5
It's obvious that a few shorts may be making some money with their rather risky trading in MNKD. But for most of them, their loses have been piling up with huge interest payments and most of their hedges, losing money or expiring worthless. each month. The big enemy for the shorts is time. This is why the lying GS is trying so hard to get MNKD below $3. So here is Spiro's big question, Who would Al Mann invite to lunch, the shorts or Vanguard, Fidelity or Blackrock? Spiro here That is actually a very interesting and logical argument. Thank you. Yes the asymmetry of information might actually be in our favor or at least in favor of our side.As retail longs we are simply bystanders. |
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Post by gomnkd on Apr 13, 2015 9:31:20 GMT -5
I also have difficulty understanding: " I've to agree that their actions have kept a lid on stock". I maybe simply don't understand what you are saying but it almost sound as if you have difficulty agreeing with that statement or that what you just said might be controversial? That how shorts work. They use their shorts to maximize price drops to get the most $ out of them. Just to be clear nothing I am saying above is said out of anger or as a personal attack (gomnkd knows that I am rather certain). I've seen companies where stock keeps going up in spite of shorting. My point is, the correlation between shorting and stock price is very strong. My earlier assumption was that shorts were constantly adding irrespective of current price. On Blackrock, MNKD position is just rounding error. They manage 1/2 trillion, and 100MM is just peanuts. It could be part of broader biotech exposure. |
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Post by nemzter on Apr 13, 2015 9:40:14 GMT -5
Blackrock could be using their own shares to short the stock as well. This is a long term play for them but they are still in the business of making money, so it wouldn't surprise me if they're loaning out their shares for shorting purposes as they wait until the explosion to the upside occurs. www.theguardian.com/business/2011/aug/31/stock-lending-short-selling |
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Post by gomnkd on Apr 13, 2015 10:00:18 GMT -5
I was thinking more in terms of Rumsfeld's Shock and Awe quick win, but MNKD will turn out to be like trench warfare in WW-1 or as in EYE-RAQ.
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Post by ezrasfund on Apr 13, 2015 10:11:52 GMT -5
How do shorts really work? Just like longs, they want to buy low and then sell high. Except in their case it is sell high and then buy low. So they have obviously already sold 90 million shares at what they think is a high price. There are just too many shares to be bought back for shorts to close out their position on market manipulation and share price fluctuations. Now, like longs, they must wait to see if their thesis will be confirmed.
Will Afrezza and MNKD succeed or fail? In the early days the CRL's meant that shorts were winning the battles. With AdCom, FDA approval, the SNY partnership, and the launch, now longs have won a few battles and the tide may have turned. Shorts may now have higher costs because of interest on borrowing and their own option hedges, but they will not surrender. IMO this will now only be resolved by the ultimate success or failure of the company. The battle lines are now drawn at around $5.25/share, or a $2 billion valuation. Just a reminder that $2 billion is not small change, and is also very close to total amount that has been invested in MNKD stock offerings.
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Post by jpg on Apr 13, 2015 10:23:24 GMT -5
I was thinking more in terms of Rumsfeld's Shock and Awe quick win, but MNKD will turn out to be like trench warfare in WW-1 or as in EYE-RAQ. In WW1 we won. With 'shock and awe' well not so sure. But I won't go any further then that to avoid politics. As for Blackrock and others lending shares: yes absolutely that part of the trade and at 30% it makes waiting less painful. It works for many of us. Why not Blackrock! There isn't one guy managing all of Blackrocks money.... The group that decided to pass the 5% ownership threshold did so with a plan. Yes MNKD is a drop in the bucket for the overall company but not to the individuals who made that call. Their jobs and future bonuses are dependent on performance. They aren't buying Novartis... |
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Post by kdaddyfresh2000 on Apr 13, 2015 11:57:09 GMT -5
Good point about how the options they use to hedge continue to expire worthless. A costI keep forgetting - unless they buy options WAY out in front. .
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