Hi nonzeroa,
To nitpick, I'll just point out that 1.3M shares is more like 12 days of "natural volume" rather than more than a month's worth. But in any case, presumably these large holders have figured out how to get in and out of positions without cratering the stock as they do so.
Also, it's not obvious that having some large holders is bearish for the stock; it's bullish if they choose not to dramatically dump it all in a moment.
If there is unexpected awful news, DDIM will gap down like any other stock... hey, I never said there was no risk on the long side!
What I'm trying to make a case for is this: for the past few quarters (at least) the path of least resistance for this stock has been up. Last week, the week before, the week before, etc., the stock's been easier to move up than down. Given that scenario, it's not the right time to short the stock! Being worried about gapping down and not being able to get stock to short is fine, but it's not a good enough reason to short a stock that is moving strongly upward.
IMHO, bears should either not establish a short position in this stock at all because it is too irrational; or wait until it has decisively broken its upward momentum before shorting, even if this means losing the initial part of the fall.
-- Pete |
