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Shorts Crucified As Most Shorted Russell 2000 Stock Gets Takeover Proposal
As we pointed out a month ago (and initially over a year ago) in this completely broken, levered-beta, mad dash for yield market, the only alpha-generating strategy that even remotely works, is to be long the most shorted stocks. This was confirmed based on the 1 year "New Normal" return of the S&P vs the "most shorted sotcks" - a trade we first suggested in September 2012 - demonstrated by the chart below.
Amusingly, as part of the trading basket of only stocks worth owning, i.e., the most shorted ones on the Russell 2000, where the beta is by far the highest, the top stock listed, the one with the highest short interest as a percentage of the total float, was none other than Blyth, Inc., as per the chart from one month ago.
According to the latest Bloomberg data, since then the short interest only rose even more, hitting an unprecedented 82.79% of all shares in the float held short.
Well, overnight a lot of shorts suddenly screamed out in terror and were suddenly silenced, not to mention carted out feet first, when none other than the most shorted Rusell 2000 stock received an unsolicited takeover proposal valuing the stock at $16.75/share, and sending it to the highest level since May.
Blyth, Inc. (BTH), a direct to consumer company and leading designer and marketer of health & wellness products, beauty products and candles and accessories for the home sold through the direct selling and direct marketing channels, today confirmed that it has received an unsolicited proposal from CVSL, Inc. to acquire, subject to conditions, all of the public common shares of Blyth for a per share consideration of $16.75, or approximately $269 million payable in CVSL shares or cash.
The proposal is conditioned on diligence and the negotiation of definitive documentation and is not supported by financing. The proposal references a meeting last week between principals of Blyth and principals of CVSL; the Company noted this meeting was held at the request of CVSL and the principals did not discuss a business combination of Blyth and CVSL.
For the shorts who still believe in a rational, fundamentally-driven market: our condolences. For everyone else - just keep betting that career-risk driven idiocy will be the dominant investing strategy until the Fed's central planning implodes, and buy what that anachronism in a market without risk, hedge funds, are shorting the most.
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it was a terrifying scream...a disturbence in the Farce.
OMG
But you can’t bitch if the shorts exploded for a legitimate business reason.
It’s the rampant criminal fraud of the Fed Put in the equity and credit markets that deserve the ire.
It's a setup to induce fear. After the peak I will short
There's no peak, that's the problem...
This is incredible fucking bullshit. I am not going to sell any of my short positions.
It already peaked and is now down 4+%
go long you silly sods
Who the hell is shorting Sturm and Ruger and Co.?
Seems silly just prior to the second American revolution.
When are the fucking shorts going to learn that selling has been owtlawed by the Bernank?
May the Farce be with us
I hope they were the few who signed up fpr ACA
Hey Tyler's. .. wasn't this worth worth noting? check the london open...
http://www.kitco.com/charts/livesilver.html
that's very interesting. I have no idea what it's all about.
Simple transfer of payments accross the Atlantic. Someone(s) need to show profits here.
Stay long my friends.
Seriously, this has to take the cake. Says it all, can't lie. If you were short, properly, you got fucked.
A genuine LOL moment, in a long run of bizarro moments.
This shit is just so fucked up only the free shit rats turning on each other will alter course. And even then POMO will take it all!
Nice strategy bro. I missed it, was I here a month ago? don'know, but I missed it.
Yes, stay long. Long and levered. I got a new Citicard with cash advance feature. It's the only way I can lever beyond margin restrictions because, well you know where I work and all.... 24K/yr.
Obama should make more levers available to me.
Over.
Cool strategy.
Buy calls on the most shorted stock, then make an "unsolicited bid" for the company at a ridiculously high price, watch the stock rip, take profits, buy puts, withdraw offer.
That would be hard for me to pull off bro but it's worth a try I guess. Until they see my picture on the employee of the month wall at walmart.
so who are the "shorts"??? Are they the banks or hedge funds? Or just the algo-bot vacuum tubes? I thought most play wasn't even human anymore? Was it just banks using free fiat to drive it down just so they could make it explode to the upside with more free money or some shit like that?
When are my massively shorted gold and silver and RRE miners going to finally explode to the upside? Talk about a Farce! I've been sitting on my positions for almost 2 years now as they've lost 90% of their value...but I refused to sell...I'm waiting on them to finally cut loose and go to the moon. Some day soon I hope so that I can cash them out and use proceeds for more real phyzz!
They are going to eat it sooo f**king large...lmao!
I'll say it again: When the casino is rigged, whether the little ball ends up on red, black or green depends on how much money is on red, black and green.
shorts are just anti social swine anyhow.
Yea Baby, we can never get enough of that shit in the attic.
I suggest merging Blyth and its proposed acquirer CVSL under the new name HerbaDeath. Icahn will be all over it.
Hard to be The Bear these days
Yep, the Fed wants to bankrupt the shorts. It's been buying the dips for years now.
LMAO!
82.79% OF ALL SHARES IN THE FLOAT!
ROTFLMAO! Looks good on them.
One knew a Blyth would be involved in yet another market event.
Interesting analysis if somebody can create it. Tracking the most shorted vs not shorted gap over time and how do they perform the following 'x' quarters.
For example, when the gap exceeds x over 1 yr the most shorted crash to earth in the following 2 quarters.
If you don't have access to Bloomberg here's a free alternative to Short Interest if you are interested in that sort of thing.
A nice feature of this site is you can copy the pages and import them into an Excel spreadsheet for further analysis.
It's interesting that the number of shares differs from Bloomberg's data. Oh well, what's a few percentage points here or there.
http://www.highshortinterest.com/all/
The Bernanke 500 moves onward.
Fuck you Bernanke!!!!
Guys remember this is not a zero sum game, this is purely an anonymous, who has the most capital to risk. This is a very simple way to make a lot of money.
1. slowly and quietly go long underlying stock of any shorted company
2. Buy up all calls that are at double or triple current stock price related underlying stock
3. Finance all the purchases if you have to
4. Spread your buying around various asset managers, funds etc so as to not look like all eggs in one hen house
5. Fund and support an LBOor stock tender offer at 3x current share price
6. Exit all shares, exit all calls
7. Pull tender offer
It doesn't get any easier than that, with no rules, no oversight, no regulation, easy as pie, even if someone sniffed it, you can always pay the multi million fine, after you made a billion...
this finance thing doesn't get any easier.