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Thank you Trans, jft and other knowledgeable persons who have helped shed light on Friday's stunning and disappointing trading. It seems the Shorts are skilled, well-funded and lack a moral compass. So my concern is, can they be beat? Even with the excellent fundamentals, say up to and including a great selldown announcement with all sorts of wonderful details, do the Shorts have weapons that will hold the pps down for a good time to come? The Shorts success in "the short term" is well documented, but as Keynes is famous for saying, "In the long run we're all dead." What will it take to set the pps loose with the strength not to be stopped by the Shorts, and how long will it take?
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New research is promised and the older firms doing IB work can do DD to include price target rises. We also know Pavel at RJ and Westlake will reevaluate price targets upwards with deal numbers. Exxon isn't taking advantage of IOC they had to pay up per the already written research reports.
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'Movieguy' pid='23121' datel Wrote:Thank you Trans, jft and other knowledgeable persons who have helped shed light on Friday's stunning and disappointing trading. It seems the Shorts are skilled, well-funded and lack a moral compass. So my concern is, can they be beat? Even with the excellent fundamentals, say up to and including a great selldown announcement with all sorts of wonderful details, do the Shorts have weapons that will hold the pps down for a good time to come? The Shorts success in "the short term" is well documented, but as Keynes is famous for saying, "In the long run we're all dead." What will it take to set the pps loose with the strength not to be stopped by the Shorts, and how long will it take?
What would make IOC be different this time around, and confound the big shorts ($1 billion short)? All previous short attacks have still been wrong, all of them. We're still in all time high ground. Okay, what takes the argument away from the big shorts? IMO, A REAL DEAL CLEARLY IN IOC'S FAVOR, and that's what I believe is coming with the XOM situation. It's the final validation of the fundamentals of IOC. IMO, this time we should have it. We just have to figure out when the actual deal news is a reality. fwiw
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I don't known if anyone else here is a member of Value investors club but they have several members over there, one inparticular, who have been very bearish on IOC for quite some time. On Friday this one member posted his "concern" with the stock and the press release. As of the end of day Friday his article & IOC were the number two discussed stock on the site only behind Tesla motors. VIC includes among it's members a number of prominent hedge funds PM's and other influential financiers. Just thought that was worth posting.
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'TxPm' pid='23124' datel Wrote:I don't known if anyone else here is a member of Value investors club but they have several members over there, one inparticular, who have been very bearish on IOC for quite some time. On Friday this one member posted his "concern" with the stock and the press release. As of the end of day Friday his article & IOC were the number two discussed stock on the site only behind Tesla motors. VIC includes among it's members a number of prominent hedge funds PM's and other influential financiers. Just thought that was worth posting.
Little historical perspective, the Value Investors club has a long-standing isue with IOC. The ring leader used to be a guy Jackson (followed by a number which I don't recall) who argued that the wells will "implode" (Bostonkenmore aka Feeltheheat subsequently ran with the story on Yahoo). He also argued that the shares were worth between $0 and $4, and this was in 2007..
I don't know whether Jackson is still at it, but that sums up their DD, really.
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Actually that guy was called Jaxson905
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Sooo,
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Outright shorting isn't a viable route for the shorts because of low availability,
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So they buy large quantities of puts.
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This shifts the shorting to the market makers, who sell short IOC shares to delta hedge their open put positions.
But even the market makers have limited time to cover naked short positions, right. It explains the rising failures to deliver count.
However
DechertOnPoint
October 27, 2008
The Securities and Exchange Commission has adopted a final rule that makes permanent its September Emergency Order eliminating the options market-maker exception to the close-out requirement of Regulation SHO. This update examines the new final rule, which also provides new guidance on what constitutes bona-fide market-making activity for purposes of the market-maker exemption from the locate requirement of Regulation SHO.
With the following implications:
We find that eliminating the Options Market Maker Exception to SEC Regulation SHO led to fewer and less persistent FTDs in optionable stocks. We also find that optionable stocks became more expensive to borrow after the Exception was eliminated, which is consistent with higher demand to borrow stocks to cover short sales. These results suggest that eliminating the Exception raised the cost to short through the options market and thus made options a less attractive alternative for short sellers. Finally, we find that elimination of the Exception lowered options market liquidity.
Sooo, sooner or later these market option makers have to buy back their nakedly shorted shares. Basically what the shorts do is force short positions on the market makers as these have some more leeway to do that, but even this is temporary.
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And let me see if I also got this:
Here's how to profit from the move and throw some sand in the wheels at the same time:
If the stock moves down sharply by one of these bear raids, option premiums go through the roof. What you do is sell puts (for instance, July 70s):
- You either collect the premium (about $5 per contract late Friday)
- Or you'll have to buy the shares at $65
I think you'll do well in both cases 
And the put selling counterbalances the put buying from the shorts at least to some extent..
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the options market maker is delta hedging and I don't think he likely holds the sold put long enough,,or more likely , he just naked shorts the common stock for his hedge
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