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InterOil; Low-intensity short-squeeze?

May 1st, 2009 · 7 Comments

We’ve been saying that IOC seems to be under steady accumulation for quite some time, as there is a lot of potential value in the stock. However, things seem to be accelerating a bit. What’s going on?

There is plenty of possible news that could come out shortly (especially DST results), but here is another possibility (not mutually exclusive). Some long fund has kicked the tyres and noted that they are sound. They will also have noted the millions of short interest.

Now, in the dog-eat-dog world of hedge funds, a (couple of) long funds might have seen an opportunity for turning on the screws. Not in any dramatic way that would lead to large scale covering, but enough to steadily  increase the short discomfort.

With every rise, the dilemma  they are facing grows, cover, or fight? And the longer they keep fighting, the more expensive the cover will be, unless they are right in shorting IOC, but we don’t see even a single half convincing argument for that. And it looks like we’re not the only ones of that opinion…

Note also the volume. On up movements it tends to be heavy, on down movements it tends to be lighter. As the saying goes, “volume speaks volumes”..

The shorts seem to bank on deals not being imminent, but as the link above already lists, there is plenty of other stuff that could go wrong for them. And deals will arrive anyway, we firmly belief, even if that might take some more time.

Tags: IOC

7 responses so far ↓

  • 1 Darcy Patten // May 1, 2009 at 10:37 pm

    Technically, I don’t care how it happens, just as long as the pps keeps going up.

  • 2 Nick // May 1, 2009 at 11:05 pm


  • 3 Janine // May 2, 2009 at 1:49 am

    Stp: Thanks again for everything you do!! The top 4 candidates to become IOC’s partner are the following: 1) Italy 2)India 3)China 4)Japan.This deal will be done by the end of this month, other candidates must step up quickly or be gone.The Arun field comparisons are closer than most people think. Tell Ken not to worry about any postings done here. Just trying to be helpful to the shareholders/longs.We are going to be very, very rich.

  • 4 Roger // May 2, 2009 at 3:55 am

    Wow another Arun …. I’m speechless

  • 5 Jim Tate // May 2, 2009 at 12:57 pm

    God bless IOC!!!!!

  • 6 Darcy Patten // May 2, 2009 at 5:02 pm

    Yo STP, I hope you didn’t take my comment wrong. I was NOT trying to slag your efforts trying to explain why we had our price run the past couple days. Any little tidbit I can learn along this rocketship ride to retirement is very cool, although my limited brain power makes it difficult to fully understand all the concepts. Life in IT doesn’t translate well to economics and financials. 😉

  • 7 admin // May 3, 2009 at 1:53 am

    We didn’t take offence, Darcy 🙂