Shelly Albaum
Jul 16, 2017
Short interest declined dramatically during the last reporting period, down 1.3M or about 38% of the total. A look at the historical pricing suggests they got roasted.
The big run-up in short interest occurred between April 28th and June 15. During those six weeks, short interest rose from 1.962M to 3.306M, a difference of approximately 1.344M.
Closing price on April 28th was 3.11, and closing price on June 15 was 3.34. In between, there was remarkably little fluctuation -- occasionally down to $3.07, briefly up to $3.82, but mostly $3.20-$3.40. We don't know where those 1.3M shorts sold, but under $3.50 is going to be true for most of them.
The big buy-back occurred the week of June 21-June 27, with abnormal volume spiking over .5M shares five days in a row, but especially June 23, which saw 2.8M shares change hands. This was the Russell rebalancing.
We don't know which short shares were bought and sold when, but it looks an awful lot like 1.3M shares were sold short starting April 28 in anticipation of the Russell rebalance, and then 1.3M short shares were bought back between June 21-27.
if that's true, then the shorts got burned, because the lowest sale price between June 21-27 was $3.58, with highs on some of those days over $4.
Those shares look like they were almost entirely sold short below $3.50 and almost entirely bought back above $3.50.
Hopefully they will go away now.
________________________
Daily Volume & Price in June
Chart Data: