Let's just list what we know about the stock and its trading action in the last few weeks and maybe that will help everyone evaluate their positions.
First we know there were over 320,000 shares registered by insiders to sell.
We also know that for at least 6 weeks prior to the recent run up most of the action on the stock were large blocks of 10,000 shares and up to 47,000 share blocks (that was the highest I saw) that were being traded at the bid.
We know the float has been increasing rapidly prior to that (the four11 deal, the geocities deal, Sequoia selling of 2.6 million shares, Yang selling 200,000 shares etc)
We also know that institutions were investing heavily in the stock through January. And the short interest had dropped by 1/2 million by mid February to 4.4 million shares.
In the last seven trading days, 20 millions shares have been traded. During the first 5, the large blocks continued to trade at the bid, In the last two of those days, the large blocks (I saw no trades larger than 10,000) were traded on the offer, not the bid, signifying either renewed institutional buying or large block short selling.
We know that the internet stocks are being billed as "safe havens" and we know that it is becoming more difficult to borrow shares on this stock.
On the options side of the coin we can see the current March open interest causes maximum pain below 70 and higher than 65. We also know we have two weeks to expiration. (open interest can change quite rapidly so this needs to be monitored)
That's all I can think of for the moment, maybe someone else can come up with more.
But here is what I gather from all this,,,, First that much of the volume in the last week and a half was institutional selling into short covering. I believe that the short interest dropping triggered the squeeze. I also think that in the last few days, large short positions are now being accumulated by market makers and hedge funds and therefore they are no longer as willing to loan out those shares. The stock has run up 20 points in the last 7 trading days. It is unlikely (but not impossible) given all the prior events that the squeeze can last more than a few more days and 10 points, if that. Of course there is also the possibility that this can be pushed up to 150 like the home shopping networks were 10 years ago, but the action just doesn't look the same.
Of course we haven't heard from the genius Barbara yet and her "rocket ship" forecasts.
On another note:
Someone, on February 12, posted an article saying that internet advertising had dropped by 28.5% in January from December. There has been no other news item similar to that anywhere. Yet it is easy to see that the number of ads on YHOO's site have decreased from last quarter. It's interesting to note though that they have numerous ads regarding their other sites and products. I assume they will count those ads as "revenue" on their first quarter report. Of course it will be expensed out on the other side, but the results will be to show they have continued revenue growth (earnings aren't important in this stock). I wonder how long creative accounting will go unnoticed. |
