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Is The FB Short Squeeze Over?

Tyler Durden's picture





 

From the lows on 11/12/12 at under $19, Faceplant has managed an impressive 50% or so levitation that has been generously positioned as being due to Zuckerberg's expert guidance and confirmation that it is in fact a viable business. The two mega volume spikes from 10/24 and 11/14 appear to have provided more ammunition as short-interest surged to record levels. The last two weeks have seen Facebook's resurgence slowing and despite the protestations of a thousand entrenched vested interests, it would appear that, simply put, this was a mega short-squeeze as short-interest has plunged to its lowest since June. One can't help but consider that those momentum buyers now in the stock will be disappointed as the short-covering scramble appears to be over for now as the last month's mega unwind has played out.

 

Lower pane shows the collapse in short-interest.

 

Chart: Bloomberg

 


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Fri, 12/14/2012 - 11:17 | Link to Comment hedgeless_horseman
hedgeless_horseman's picture

 

 

FB?  I haven't shopped at a Fashion Bar for decades. Everyone sure did look good in those Barracuda jackets.  Try as one may, you could never find them on sale.

Fads...they all fade.

Fri, 12/14/2012 - 11:16 | Link to Comment camaro68ss
camaro68ss's picture

Dude, I would rock that jacket for sure. the 80's are coming back.

Fri, 12/14/2012 - 11:22 | Link to Comment Joe Davola
Joe Davola's picture

I miss the wool Eisenhower Member's Only jacket I once had.  Should have never parted with it - in spite of the lining falling apart.

Fri, 12/14/2012 - 11:50 | Link to Comment CvlDobd
CvlDobd's picture

I would rock the shit out of that jacket.

I love my McQueen edition Persol 714 sunglasses

This is the king of cool we are talking about! McQueen's coolness transcends fads.

Fri, 12/14/2012 - 11:36 | Link to Comment aerojet
aerojet's picture

I'm pretty sure that had to be before the 80s since Steve McQueen died in 1980 and he looks like he's in his prime in that photo.

Fri, 12/14/2012 - 11:29 | Link to Comment Joe Davola
Joe Davola's picture

That grin says 'hurry up cameraman, I've got the muchees!'

Fri, 12/14/2012 - 11:07 | Link to Comment hugovanderbubble
hugovanderbubble's picture

Black Swan coming 

Canadian and Australian Reits...

Fri, 12/14/2012 - 11:16 | Link to Comment mdtrader
mdtrader's picture

If they monetize facebook it will be the biggest company in the world. 

Remember all those people who thought Google was massively overvalued when it came to market!

Fri, 12/14/2012 - 12:05 | Link to Comment boogerbently
boogerbently's picture

FB P/E 255. About 20X overpriced.

http://www.google.com/finance?q=NASDAQ%3AFB&ei=rUvLULjPF5jwlgOUKA

GOOG P/E 22. Much more reasonable.

http://www.google.com/finance?q=NASDAQ%3AGOOG&ei=sUvLUND_Lpm4lAOkOQ

FB has no product. Just a lot of "users". They don't go there to buy things. They don't click on ads.

It's not a good format for mobile. It won't make money as a "free" site, they will use a majority of users if they charge. I don't think it will ever repeat it's first-day high.

Fri, 12/14/2012 - 11:10 | Link to Comment hugovanderbubble
hugovanderbubble's picture

Selling Calls..

 

Loading Puts...

 

(THE YEAR IS DONE FOR THE LONG CHICKEN)...Time for BEARS 

Fri, 12/14/2012 - 11:18 | Link to Comment StoleYourMoney
StoleYourMoney's picture

See you at $5, FB

Fri, 12/14/2012 - 11:19 | Link to Comment Killtruck
Killtruck's picture

Facebook? That thing's still around?

Fri, 12/14/2012 - 11:23 | Link to Comment haskelslocal
haskelslocal's picture

You shold eat a Chipotle buritto when saying this.

Fri, 12/14/2012 - 12:07 | Link to Comment boogerbently
boogerbently's picture

CMG P/E 32. FB, 255.

Fri, 12/14/2012 - 12:02 | Link to Comment azzhatter
azzhatter's picture

the statists need a place to hang out

Fri, 12/14/2012 - 11:21 | Link to Comment buzzsaw99
buzzsaw99's picture

just in time for the pension funds to buy in. in the future zuck will be worth $50B and FB will be a zero. Nice work if you can get it.

Fri, 12/14/2012 - 11:22 | Link to Comment haskelslocal
haskelslocal's picture

With the % of float increasing substantially recently, doesn't that increase make up the entire decrease attributied to % of short interest float? If so, there's no net change overall in short interest. It just shrank comparative to outsatanding flood of float.

And ifit's a wash, would it make for a good short candidate today? Or is that dependent on how/when the massive influx of inside holders decide to sell?

Seems to me, if they've been convinced to hold the line, the price will leviate with their actions. 

 

Fri, 12/14/2012 - 11:26 | Link to Comment buzzsaw99
buzzsaw99's picture

the bottom pane is nominal and remarkable

Fri, 12/14/2012 - 11:29 | Link to Comment Bay of Pigs
Bay of Pigs's picture

Substantial float? Yeah, like 54% the last month. No dilution there <sarc>.

November 13th: 1.332 billion shares, 49% of shares outstanding.

December 13th: 124 million shares, 5% of shares outstanding

Read more: http://www.businessinsider.com/facebook-lockup-release-2012-8#ixzz2F2YxqlKK

Fri, 12/14/2012 - 12:59 | Link to Comment haskelslocal
haskelslocal's picture

Using the data you provided, "The Business Insider" suggests that the float increased 70% since August.

There are now more shares available with the lockouts ending. If % of shares short were held constant, then after the lockout, the total short shares would have decreased as a % of floated shares without anyone bailing on their short postions anyway. So I don't see how the charts in this article tell the full story without an adjustment.  

IMO, any meeting at FB headquarters encouraging shareholders to "hold the line" worked. They didn't sell. The price reflects that. Only at the next price platteau will some of the holders be teased with the prisoners dillima.

 

 

LOCK-UP RELEASES:

  • August 15th, 2012 (next Thursday): 268 million shares, 10% of shares outstanding.
  • October 14th: 249 million shares, 9% of shares outstanding.
  • November 13th: 1.332 billion shares, 49% of shares outstanding.
  • December 13th: 124 million shares, 5% of shares outstanding.
  • May 17th, 2013: 47 million shares, 2% of shares outstanding.

Over the next 4 months, in other words, 2 billion Facebook shares will become eligible for sale—about 70% of Facebook's total shares outstanding.

Read more: http://www.businessinsider.com/facebook-lockup-release-2012-8#ixzz2F2t1lsVZ

Fri, 12/14/2012 - 11:36 | Link to Comment muppet_master
muppet_master's picture

UNFORTUNATELY

i won't be able to short FB (flopbook) @ $30 bc it won't reach $30...when it was @ $28 a week or so ago, i reached this conclusion, when one of the shoe shine boys at cbs-mw screamed BULLISH...(NOTE; he didn't scream bullish when @ $19, but ONLY when it was @ $28...= i realized the TOP was in...aaah shucks !!! won't be able to short it @ $30!!)

but shorted @ $26.7, $27.5 and $28.4 = avg SHORT price on FB = $27.5

how you avoid "short squeezes" 1) scale in 2) IF necessary you sell DEEP in the money PUTS and ride 3) buy DEEP out of the money calls = sooooo easy !!!! NOBODY should be "squeezed" if you follow the 3 rules above

see link below: where i talked about FB TOP = $28....oh by the way i shorted spx on black fri (1400+) and shorted more weeks later @ 1415...and RODE up til QE4 = 1439...= DIDN'T SHORT above 1418...that's ok..just wait for below 1300 this year..LOL !!!

http://www.zerohedge.com/news/2012-12-04/are-stocks-cheap#comment-3032540

 

Fri, 12/14/2012 - 11:43 | Link to Comment Seer
Seer's picture

When is California's fiscal year end?  I was thinking that FB needed to be pumped up so that CA wouldn't take a big dive on tax revenues for FB (IPO sale).

Fri, 12/14/2012 - 11:53 | Link to Comment Vince Clortho
Vince Clortho's picture

It's never over.

Fri, 12/14/2012 - 12:16 | Link to Comment Lendo
Lendo's picture

Needs moar Grouponzi

Fri, 12/14/2012 - 12:18 | Link to Comment adr
adr's picture

People only use Facebook for status updates now. Forcing people into the timeline profile killed the photo sharing aspect of the site.

Mobile is only used for status updates and it has no ads. Which is why Facebook is trying to force users to pay money so their status updates appear first on friends screens.

Facebook is done, there is no money to be made, there never was any money to be made. Zuckerberg got his cash for allowing the government to get their hands on the personal information of hundreds of millions of people.

Which is why the stock will probably go north of $100, because Wall Street loves corporations that don't make any money but can make up for it with galactic levels of bullshit. Even the stock of bankrupt corporations can triple in a few short days.

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