>>Math Doesn't Add up On Short Interest.
Peter, you are asking good questions. My guesses (and I am only guessing) are as follows:
1)The official float numbers provide only the low estimate of the number of shares available for trade. My assumption is that bondholders and their brokers were able to find stock to borrow "outside the float".
I am sure plenty of CYMI stock is on deposit as a collateral. Such shares are formally not the part of the float, but could be made available for loans. The company or its employees may have a line of credit secured by stock. Banking institutions holding insiders' CYMI shares as a collateral can lend them out, especially if the borrower holds a convertible bond.
Also, Sep.30 reports show some funds holding a significant long position in CYMI (to the tune of 4M shares). Some of these funds are managed by brokerage houses. If the fund managers plan to keep their long position through the techs decline, they could lend their shares to related brokers for trading (shorting the stock and covering later at a lower price). This is just a guess - I am not sure if this is an acceptable practice.
2) The daytrading volume in CYMI is not directly related to the size of the float - there is a delay between actual trades and settlement, so if somebody buys and sells the same amount of shares, the share distribution between net buyers and net sellers is not affected at all.
I am not sure that these are reasonable explanations, but they seem to make CYMI share price performance after the bond issue more plausible:
(a) Additional 3.4 million shares were sold into the market, resulting in a rapid price drop. Very approximately, the "float value" before the bond issue was $47*6.6m = $310m. With additional 3.4m shares made available, "fair" share price became $310m/(6.6m+3.4m) = $31 - pretty close to share price before the
earnings.
(b) On top of it, the whole sector was devalued through October-November. Virtually every semi equip stock is 35%-40% off its peak (some even more), so CYMI's current price of $19.25 is very much in line with the rest of the sector under my "float value" theory.
To a degree, long-term CYMI holders got screwed by the issuance of debentures. A lot of people (me included) did buy CYMI before Oct.24 hoping for good earnings and unaware of the bond issue. They were disappointed, but buying CYMI at 30 (as I did) turned out to be no better nor worse than buying AMAT pre-split. If Asian fears are overdone, we'll all do fine in the long run. Strategically, CYMI is in a very good position to benefit from the drive towards improved efficiency. All the new buyers below $20 are getting a great value IMHO - although the same can be said about TER at 32, etc.
Happy thanksgiving.
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