FYI regarding KLIC if you are still short, from a source of mine... I have to admit the huge recent volume does raise a red flag.
"Alex... Welcome back. I don't know if you were able to watch KLIC's climb last week, but watching the tape, it was not action that I would attribute to either the general market rally or to fundamentals, especially the last day when almost 10mm shares were traded. Something is going on, and I believe it is related to a buyout. I first heard that KLIC was for sale (very reliable source) a little over 2 months ago, and have pretty much left it alone since then. I shorted when it approached 17 late last week, thinking it was far overdone but then volume increased above an already extreme level, with large blocks coming in everywhere. I did not think think this looked like short covering, and bailed out the next morning to break even. Checking around, I learned some other things late this weekend that make me think something is going on, and if so we should know pretty soon.
Fundamentally, there is little improvement in KLIC - they received one good order, and everyone got excited, but the truth is more like what CHPC (a good customer of KLIC) said in their conference call last week - they have no need to buy any bonders until well into next year. It will be a long time before any meaningful recovery in earnings arrives at KLIC. I cannot see much premium over current levels even in a buyout, but there could be some. I came up with a short list of potential buyers (there are not many that both can and would want to), and the most likely candidate is not very much into the sector now, but KLIC would compliment what it already has, so it might be willing to pay more for it.
Be careful with your short - I may well be wrong in what I am seeing and it is mostly speculation on my part, but there is always the outside chance that I am right. Good luck, and glad to see you back." |
