InterOil short interest continues to climb.

[Gator]

Short interest in InterOil stock listed the New York Stock Exchange rose in the second half of December compared with the prior two-week period, according to the exchanges semimonthly statistics. InterOil short interest totaled 10,848,866 shares, as of Dec. 31, up from 10,830,918 shares as of Dec. 14.   The short ratio, or the number of days' volume represented by outstanding share positions, was 18.63 days of average daily volume, compared with 12.96 days for the previous reporting period.  InterOil continues to have one of the highest percentages of shares short vs. the free float yet InterOil stock is up 11.11% year to date.

[jft310]

If they cover they are nailed. If they dont short more they are nailed. Not a good place to be short IOC .

[johnwgrant]

Forgetting all this stuff about "offsetting long positions and/or call positions".... I worry simply because the shorts have shown an incredible knack for driving the price down on news - even good news. So, suppose InterOil announces a deal but it is not the anticipated blockbuster deal. Perhaps a modest amount of cash upfront and a smaller percentage sell-down to a non-top tier Oil Major. Do the shorts crush the stock price - not because the news is bad, but because they know they control the price !?!? Even if we get a deal, we are still years away from actual positive cash flow. The shorts may be convinced that barring a take-out offer from a Super Major, they can control the stock price to their benefit.

Am I giving the shorts too much 'respect' for their ability to manipulate InterOil's stock price ?

[jft310]

IOC will be fine the short answer is yes.

[Optionray]

Forgetting all this stuff about "offsetting long positions and/or call positions".... I worry simply because the shorts have shown an incredible knack for driving the price down on news - even good news. So, suppose InterOil announces a deal but it is not the anticipated blockbuster deal. Perhaps a modest amount of cash upfront and a smaller percentage sell-down to a non-top tier Oil Major. Do the shorts crush the stock price - not because the news is bad, but because they know they control the price !?!? Even if we get a deal, we are still years away from actual positive cash flow. The shorts may be convinced that barring a take-out offer from a Super Major, they can control the stock price to their benefit. Am I giving the shorts too much 'respect' for their ability to manipulate InterOil's stock price ?

Possibly short term, however, I think with multiple bids on the table, once a bid is accepted, that could trigger a bidding war.  Could be a very dynamic month or two after the bid is accepted.  If as you suggest, a perceived, less than optimal offer is accepted and the price is driven down, I am pretty sure I will load up the boat because I feel that is when things are going to get really interesting.

[Justin94360]

John, when we went from $9 - $83 I believe short interest was over 11 million, the EWC deal wasn't actually what the market wanted/expected and still they couldn't hold it then.

[Libtardius Maximus]

Forgetting all this stuff about "offsetting long positions and/or call positions".... I worry simply because the shorts have shown an incredible knack for driving the price down on news - even good news. So, suppose InterOil announces a deal but it is not the anticipated blockbuster deal. Perhaps a modest amount of cash upfront and a smaller percentage sell-down to a non-top tier Oil Major. Do the shorts crush the stock price - not because the news is bad, but because they know they control the price !?!? Even if we get a deal, we are still years away from actual positive cash flow. The shorts may be convinced that barring a take-out offer from a Super Major, they can control the stock price to their benefit. Am I giving the shorts too much 'respect' for their ability to manipulate InterOil's stock price ?

Someone posted a while back the short theory was the SD would be lacking and they would just short some more to keep the lid on. They would only consider covering if there was a buyout offer.

I think it was Bert that stated this, I could be wrong, feel free to correct me.

[jft310]

Lib- This is short B/S feed to Bert. First the bids are not lacking . Second if a short waited till a buy out they couldn't cover. Anyone who watches buyouts and stock reactions knows that stocks gap up when the news comes out.One can't cover the gap up cause the stocks not trading. IOC in buyout is worth well over $200 a share. Nice gap or what. A short can't afford that risk therefore its just B/S meant to scare longs into taking full positions. If Bert believes that nonsense he needs to call Wayne Andrews and get some truth feed to him.

[admin]

Even if they could (and look at how Herbalife has been trading recently and you will realize that even the biggest shorts aren't almighty), why would they?

There are what, 10,000 shares trading in the US? Why short a company with (post-deal) little downside risk (if the price doesn't really explode past reasonable valuations) and much upside risk (time ticking to monetization, other deals, and accelerated exploration, the odds on which are pretty good)?

Shorting isn't cost or risk free, you have to keep that in mind. The risk-reward shifts in a big way against the shorts post-deal, even a sub-par deal, as it eliminates much, if not most risk.

[Palm]

To be able to keep on shorting here shares have to be available. Broker is saying shares harder to find today. Costs to borrow going up and some large holders sold. Those buying those shares are not wanting to lend out shares.

Observe the signs or get trampled. The Antelope herd will trample those caught in the crossfire.