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Post by EveningOfTheDay on Dec 2, 2015 14:34:06 GMT -5
I would venture there has been some covering as of late, but 125 million shares is a lot of shares. The only hope to successfully cover at this point is to continue the scare tactics until major capitulation from current retail and holders. I still maintain that short from that, it remains unclear how shorts would manage to cover without having a major spike in the sp. I would also add that given the stubbornness of those holding, it might me a mathematical impossibility for many of them to cover at any price close to current levels, and perhaps any levels that would make their bet profitable, especially once interest reates on borrowing are taken into consideration. I still would like to see MNKDs management coming out with some confidence building statements and some clear plan in financing. I thing that is, at the moment, the only thing that is missing from the equation now that it seems very clear Sanofi is not going anywhere.
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Post by suebeeee1 on Dec 2, 2015 14:39:57 GMT -5
Why shouldn't they cover at $1.76? There were millions of shares being wildly sold off on the FUD presented. This was a tailor made opportunity to take cover. If a short did not do so on that day, I sincerely expect that they are going to get caught in the upswing. I haven't been so sure something is about to happen in a very long time! The TASE shares can't be shorted, right? And my shares can't be shorted And I'll bet the 2+ million shares purchased by the ETF yesterday can't be shorted (or only under very strict rules). And the interest rate for lending shares is dropping. Not to mention all of the study completion, rumors about better coverage, Sanofi internal and external reaching out about Afrezza, peer reviewed publications by prescribing physicians, funding for MNKD through 2017 with no problem.... just what are the shorts thinking? Will Jason lose a fortune on his put options like so many other hedge funds are losing money lately? My bet is that he covered a long time ago. He isn't THAT stupid!
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Post by cathode on Dec 2, 2015 14:44:47 GMT -5
I would venture there has been some covering as of late, but 125 million shares is a lot of shares. The only hope to successfully cover at this point is to continue the scare tactics until major capitulation from current retail and holders. I still maintain that short from that, it remains unclear how shorts would manage to cover without having a major spike in the sp. I would also add that given the stubbornness of those holding, it might me a mathematical impossibility for many of them to cover at any price close to current levels, and perhaps any levels that would make their bet profitable, especially once interest reates on borrowing are taken into consideration. I still would like to see MNKDs management coming out with some confidence building statements and some clear plan in financing. I thing that is, at the moment, the only thing that is missing from the equation now that it seems very clear Sanofi is not going anywhere. Isn't the most likely case that the major shorts are well-positioned to exit with call options? I don't really follow the options market, so I don't know the numbers going around. It seems like the easiest way for the shorts to make money is to drive the price down, accumulate long positions and cheap call options, then execute the options as they ride the share price up. Make money going down and up.
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Post by ashiwi on Dec 2, 2015 14:47:03 GMT -5
Fidelity has lowered the interest to borrow shares again today to 53.57%. They have lowered the interest over 11% in the past 2 days. Somehow shorts are covering without a spike in price. Probably covering into some tax selling.
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Post by saxcmann on Dec 2, 2015 15:09:44 GMT -5
Fidelity has lowered the interest to borrow shares again today to 53.57%. They have lowered the interest over 11% in the past 2 days. Somehow shorts are covering without a spike in price. Probably covering into some tax selling. Why do you think they covered? The proof is a lower SI report. For all we know more shares maybe bought and now loaned out?
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Post by phantomfj on Dec 2, 2015 15:26:06 GMT -5
I would venture there has been some covering as of late, but 125 million shares is a lot of shares. The only hope to successfully cover at this point is to continue the scare tactics until major capitulation from current retail and holders. I still maintain that short from that, it remains unclear how shorts would manage to cover without having a major spike in the sp. I would also add that given the stubbornness of those holding, it might me a mathematical impossibility for many of them to cover at any price close to current levels, and perhaps any levels that would make their bet profitable, especially once interest reates on borrowing are taken into consideration. I still would like to see MNKDs management coming out with some confidence building statements and some clear plan in financing. I thing that is, at the moment, the only thing that is missing from the equation now that it seems very clear Sanofi is not going anywhere. Isn't the most likely case that the major shorts are well-positioned to exit with call options? I don't really follow the options market, so I don't know the numbers going around. It seems like the easiest way for the shorts to make money is to drive the price down, accumulate long positions and cheap call options, then execute the options as they ride the share price up. Make money going down and up. I have never understood this covering of short positions with call options theory.....With a normally traded stock I can see it happening if there are only a few shorted shares. With over 100 million shorted shares there is no way in hell there are enough call options out there to cover those shares.....even if those are uncovered call options, they will have to come up with those shares if the call is exercised, which would mean buying on the open market to get the shares to cover, which should drive the prices up.....I suppose if the shorts are sure the stock price is going to zero it makes sense, but wow! kind of a big gamble, not?
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Post by gwb on Dec 2, 2015 15:28:16 GMT -5
Fidelity has lowered the interest to borrow shares again today to 53.57%. They have lowered the interest over 11% in the past 2 days. Somehow shorts are covering without a spike in price. Probably covering into some tax selling. Why do you think they covered? The proof is a lower SI report. For all we know more shares maybe bought and now loaned out? Saxcmann you may already have this information , but I will provide it for the people that do not . The link to Interactive brokers will show the available shares to borrow at this brokerage . They charge short borrowers a lot more than SC or Fidelity does . Aswhiwi using Fidelity 's level two can see the rate charged , but I don't think the amount available can be seen . This link gives you a quick available in the market at Interactive . As Interactive is the more expensive ( sometimes the rate charged is 100% or greater to borrow mnkd shares ) , it makes sense that once the number of available shares to short increases , the rates at SC and Fidelity will drop because demand is lower .
www.interactivebrokers.com/en/index.php?key=mnkd&cntry=usa&tag=&ib_entity=llc&ln=&asset=&f=4587&conf=am&amref=1
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Post by saxcmann on Dec 2, 2015 15:43:10 GMT -5
Why do you think they covered? The proof is a lower SI report. For all we know more shares maybe bought and now loaned out? Saxcmann you may already have this information , but I will provide it for the people that do not . The link to Interactive brokers will show the available shares to borrow at this brokerage . They charge short borrowers a lot more than SC or Fidelity does . Aswhiwi using Fidelity 's level two can see the rate charged , but I don't think the amount available can be seen . This link gives you a quick available in the market at Interactive . As Interactive is the more expensive ( sometimes the rate charged is 100% or greater to borrow mnkd shares ) , it makes sense that once the number of available shares to short increases , the rates at SC and Fidelity will drop because demand is lower .
www.interactivebrokers.com/en/index.php?key=mnkd&cntry=usa&tag=&ib_entity=llc&ln=&asset=&f=4587&conf=am&amref=1
Okay,thanks gwb. More shares could have been purchased recently to lend for shorting therefore more shares available? shorts could be covering but low volume indicates not fast enough for big drop in rates?
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Post by ashiwi on Dec 2, 2015 15:43:13 GMT -5
Fidelity just lowered the rate to loan shares from 42.5% down to 35%. It's all about supply and demand.
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Post by stevil on Dec 3, 2015 2:06:15 GMT -5
Fidelity just lowered the rate to loan shares from 42.5% down to 35%. It's all about supply and demand. I'm kind of confused... Isn't it a bad thing that there is massive covering and the SP still hovers around $2.20?
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Post by EveningOfTheDay on Dec 3, 2015 2:41:34 GMT -5
Fidelity just lowered the rate to loan shares from 42.5% down to 35%. It's all about supply and demand. I'm kind of confused... Isn't it a bad thing that there is massive covering and the SP still hovers around $2.20? I have serous doubts that any covering going on right now is, as you said, massive. We will have to wait and see where things stand when we get the next few reports.
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Post by anderson on Dec 3, 2015 6:57:21 GMT -5
The funds that are buying to rebalance, anyone check them to see if they loan shares? Buy a million, and then put them up for borrow. Most likely scenario. Then they can finish their buying and keep the stock price level. How many times can you own the same shares. Getting the shares to cover the first buy spiked the interest rate, but a few days later there is a glut of shares for borrowing hence rate drops like a rock.
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Post by longinvstr on Dec 3, 2015 11:26:29 GMT -5
To my logic, the enduring high price to short MNKD is evidence of sponsorship. There's no way ~$2 represents the equilibrium point b/t buyers & sellers. In other words, if one inputs the current MNKD short thesis, and all its conditions (% of float short, 30-some % interest to carry, etc), into a black scholes box, I believe it would spontaneously combust. No doubt my view of the landscape is skewed by my own long bias but ... the only way this warped short condition persists is that some have said, "I know it doesn't make investment sense but we are willing to pay to handicap, hobble, and compromise MNKD's efforts. It must die at any cost ... and we'll pay it.
Funny ... I was reading some posts here placed just prior to the SNY deal announcement. Fincl tightrope history repeats/continues, in that some said Al would offer-up 100MM to carry MNKD thru & to it. And, some were remarking about the ~9% short carry cost and how unbelievably high it was. To now have been up in the 40's is truly astonishing in this zero IR environment. The market is waving a bright red flag and shouting "OVER HERE!!" and the SEC whistles down the sidewalk.
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Post by patryn on Dec 3, 2015 11:27:31 GMT -5
Fidelity just lowered the rate to loan shares from 42.5% down to 35%. It's all about supply and demand. I'm kind of confused... Isn't it a bad thing that there is massive covering and the SP still hovers around $2.20? I have perused the publicly offered interest rate for the past year and compared it to the stock price as well as volume and it seems that the interest rate is related mostly to retail borrowers of which there are very few compared to institutional borrowers. There is not a strong correlation between interest rate movements and stock price. There is a weak inverse correlation between a spike in interest rate and a fall in share price but it could be just noise as we do not have enough data. The most damning evidence though is that the interest rate offered by Fidelity to borrow/lend is actually not at all correlated with the 2 week delayed open short interest. Again I think this is because IB, Fidelity, and Schwab represents mostly retail investors and they are a drop in the bucket compared to the "dark forces" at work (Institutional investors and hedge funds probably have worked out pre-arranged blocks of shares being loaned).
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Post by dreamboatcruise on Dec 3, 2015 12:00:28 GMT -5
patryn... Schwab even states that they don't lend to hedge funds. They claim Fidelity does. This is their justification for why they pay less than Fidelity. (take with grain of salt as there obviously was an agenda in that info).
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