Tejek: Since it appears the level of short interest has dropped in recent weeks, I see that is another positive. Can anyone confirm that drop off with real numbers? I don't know where to look.
This touches on one of my pet gripes. And that is, is it so difficult for the markets to keep tabs on how much any one equity is shorted? My best wish would be to get that information daily, but barring this then weekly at minimum. But so far, as far as I know, you can only get it monthly. Here's a site:
viwes.com
From this you can see that in May the WCOM short size basically tripled, from ~45 Million to ~139 Million shares. This may be a reflection of WCOM falling from ~$6 to $4 before doing its final swan-dive to ~$1.20. Since then professional shorts may have either started to cover or are rolling in/out/in depending on the equities direction.
As for Fridays rolloff, I wasn't surprised by its pullback. I was a little surprised by the strength early on, but not overly so as I'd been expecting the players to move to the sidelines in preparation for the meeting. Once nothing untoward occurred...well....the flippage game for pennies along with downside pressure reasserted itself.
So where to from here? My WAG, for what it's worth, is it's clear Sidgmore & crew are making all the right moves (so far). But todays markets are all about showing the money (and double tripling checking it with more than one audit committee - I joke - but not by much), hitting announced intentions and selling into every sign of strength in the mean time. As such I expect WCOM to wallow around between ~$1.30 and $1.60. There appears absolutely no reason to chase this stock. Indeed, even after the credit line is announced as being secured (along with sufficient details to satisfy any independent bean counter) I still don't expect much through the summer quarter. The market has been roundly burned by the likes of XOXO, Global Crossing, and all the rest, so will probably need to see hard evidence.
This is not to say WCOM falls into that group. Only that the market has been snake-bit twice (at the least) by the telecom sector. It will be some time in overcoming a very human reluctance to getting bit yet again, and it'll most certainly need the salve of hard evidence to get over the past few months of being roundly chomped on.
In the meantime one can trade it for pennies (the volume remains hellacious yet with very little movement when compared to the volume), or wait on all dips to build a longer term speculative position, or simply hang on the sidelines waiting on that salve....I ignore the short tactic at this point because, to me, it's something of a dangerous game to play juxtaposed to an intermediate period that'll probably show little movement excepting the usual bottom formation stuff....uhhhh....unless you shorted in the teens, etc., and still have an open position.
And if that is the case (holding an open position) then I'd just have to ask said short...."Why continue to maintain an open position? IMHO the blood has been squeezed from this stone. Would it not be less risky just to close the position and move on to fairer game at this point?" But I guess if the position is maintained perhaps it's the inverted tendency of the buy side waaay back when WCOM was $60 and folks thought the moon was at hand. That is, both sides do suffer that human frailty of hubris and ego when the tide's running their direction. ;-)
Now let's see how it plays this week...
John~ |
