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Near Record Institutional Short Interest Caught With Pants Down In Motorola Mobility Acquisition

Tyler Durden's picture




 

As if hedge funds did not have enough to worry about with redemption requests galore after last week's epic rout and vol surge, today's Google stunner acquisition of MMI caught a near record number of them with their pant down. The company, which had over the past year, ever since its spin off, become one of the most despised public companies, saw a 250% increase in its short interest since December, peaking at 25 million shares short, dropped to just under 20 million shares, or essentially the second highest to date. These are precisely the institutional shorts who are hating their live right now as they are sitting on a $260 million paper loss, enough to wipe out several mid-size hedge funds. Speaking of, following rampant rumors spread by CNBC's strategy session last week that various funds were blowing up left and right (in addition to perennial bete noire Paulson & Co of course), we have yet to hear of even one casualty. Just how tight of a lid are prime brokers keeping on their hedge fund client casualties if not one peep has been uttered about who blew up? Following today's trouncing in MMI, we doubt this secret will be such a secret for much longer.

 

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Mon, 08/15/2011 - 13:50 | 1562212 HungrySeagull
HungrySeagull's picture

CHARGE IT!

(QE3?)

Mon, 08/15/2011 - 13:53 | 1562223 Mike2756
Mike2756's picture

This should be enough to drive the spx parabolic!

Mon, 08/15/2011 - 13:54 | 1562234 SheepDog-One
SheepDog-One's picture

Right! And we're going into Jacksons Hole where QE3 trillions are supposed to be delivered, with wildly rising markets...wheres the need for QE?

Mon, 08/15/2011 - 13:57 | 1562248 Mike2756
Mike2756's picture

Big Macs ain't expensive enough, force the proletariat to eat much healthier cat or dog food.

Mon, 08/15/2011 - 14:04 | 1562273 WonderDawg
WonderDawg's picture

QE3 trillions are supposed to be delivered? According to whom? From everything I've read, QE3 is not a given. In fact, it seems like more and more people are saying it won't happen.

Mon, 08/15/2011 - 14:15 | 1562334 SheepDog-One
SheepDog-One's picture

Right, but markets have baked in some 'QE3' of around $2.5 trillion avg amount over the last 6 months...it will be interesting to see what happens when its announced we're just coasting along on ZIRP fumes and no QE bags of free crack are delivered to Wall St!

Mon, 08/15/2011 - 14:30 | 1562408 trav7777
trav7777's picture

I dunno...the market's reaction during the huge slide was a telegraph that QE3 was not forthcoming.  I don't believe the downgrade could move the SPY that far that fast.  But here we are back in a V bottomed uptrend.

Either way, volatility like this is usually a sign to GTFO.

Mon, 08/15/2011 - 14:36 | 1562444 Threeggg
Threeggg's picture

and here we are right at the pre-downgrade dow.

I know, "confidence" ! 

Mon, 08/15/2011 - 15:24 | 1562644 WonderDawg
WonderDawg's picture

Patience, little bear, this too shall pass. Predictable rally of a short-term oversold market. I expect we'll be red for the week when it's over.

Mon, 08/15/2011 - 13:52 | 1562216 Racer
Racer's picture

They didn't know about it before it was announced? I am stunned!

Mon, 08/15/2011 - 14:01 | 1562261 HungrySeagull
HungrySeagull's picture

While the masses are transfixed on the Storefront TV's blaring the news that Google stepped on a annoying little roach and eliminated yet another barrier to it's dominance, the Sheep fail to notice the thuds and bodly fluids splasing from the suicides above them.

Mon, 08/15/2011 - 14:34 | 1562434 Oh regional Indian
Oh regional Indian's picture

Well said HS. Trance-fixed. Dis-tracted. Lost.

And not just America, everywhere. I went to a mall in India yesterday. Yick!

ORi

Mon, 08/15/2011 - 15:10 | 1562596 DCFusor
DCFusor's picture

And I thought that warm wet stuff hitting my back was trickle down economics benefits!  It can't be piss, can it?

Mon, 08/15/2011 - 16:34 | 1562906 Sokhmate
Sokhmate's picture

Most probably not.

Mon, 08/15/2011 - 14:31 | 1562419 trav7777
trav7777's picture

MMI was a shitty company...they've LONG since been left far behind in terms of handsets.  Google bought them I guess for vertical integration but who is going to get them to parity with the frontrunners of HTC and Samsung?

Mon, 08/15/2011 - 13:52 | 1562218 runlevel
runlevel's picture

awesome

Mon, 08/15/2011 - 13:56 | 1562221 Mercury
Mercury's picture

Hey well it's nice to see insider info stay inside for once...

Mon, 08/15/2011 - 13:53 | 1562224 SheepDog-One
SheepDog-One's picture

Oh well, a bunch of institutional traders take huge losses...Im not sad!

Mon, 08/15/2011 - 13:54 | 1562227 swissaustrian
swissaustrian's picture

Nokia experienced a short squeeze aswell today.

Mon, 08/15/2011 - 13:54 | 1562228 laomei
laomei's picture

haha, no wonder all the "news" pieces are whining about how this is a "bad" acquisition.  makes total sense now

Mon, 08/15/2011 - 13:59 | 1562253 vast-dom
vast-dom's picture

Google will buy Sprint next. That is the logical step. And then it's game over biyatchez!

Mon, 08/15/2011 - 14:33 | 1562426 trav7777
trav7777's picture

another also-ran in the US mobile space?

Mon, 08/15/2011 - 14:47 | 1562492 SwingForce
SwingForce's picture

For their 4G Network based on Internet Protocol (50/50 owned w/ Clearwire).

Mon, 08/15/2011 - 15:04 | 1562569 vast-dom
vast-dom's picture

yes but an also-ran with pre-existing infrastructure and some subscribers could turn into something quite large. And Google gets to subsidize more at charge fair cell carrier charges with open-ended contracts and we have a real winner. 

Mon, 08/15/2011 - 13:59 | 1562255 Cdad
Cdad's picture

Sweet!  Blown up hedge funds!  I'm McLovin' it.  If we cannot get Jamie "the whiner" Dimon to fire bankers, just blow them up on one trade instead?

This is such good news.

Mon, 08/15/2011 - 14:05 | 1562268 SheepDog-One
SheepDog-One's picture

Carnage on Wall St funds, CEO's threatening to withold campaign contributions and telling americans they should fire all their politicians, apparently Bernank will now just stroll into Jackson hole and announce QE $trillions nevermind wildly rising markets daily....supersized my anarchy Im lovin it!

Mon, 08/15/2011 - 14:08 | 1562296 topcallingtroll
topcallingtroll's picture

Dear Dawg.

It took the roman empire 200 years from peak before the sucker went down. Dont hold your breath.

more kisses

Your loving troll

Mon, 08/15/2011 - 14:14 | 1562323 SheepDog-One
SheepDog-One's picture

What is your post supposed to mean? Everything works on the same and on the same timeline all thru history? Is that what youre trying to say?

Mon, 08/15/2011 - 14:37 | 1562448 Cdad
Cdad's picture

He doesn't know what he is saying, dog.  Some sort of rhetorical Hail Mary pass.  Superdee duper strong argument.  And yes, dog, the microchip and time compression are the primary problem with his comment game plan.

It is just moron city on every site I have visited today.  Must be Wall Street bankers out there posting their IQ levels in desperate attempts to get people to buy this shit market.

Mon, 08/15/2011 - 17:05 | 1562992 Hulk
Hulk's picture

He also forgot that Rome didn't have computer networks, which allow us to crash at half the speed of light...

Mon, 08/15/2011 - 14:45 | 1562449 Oh regional Indian
Oh regional Indian's picture

SD1, looking at the rest of his comment he is either drunk or picking you up for his swinging ways.

Either way, clearly saying something took 200 years 2,000 and some years go (or there-abouts), is somehow meaningful now is daft.

Time has sped up. Qualitatively for sure. Mid-august 2011, I remember January like yesterday.

But that is also going to change soon, this rushign helter-skelter of time. We'll enter the eye of the needle with exquisite slowness.

ORI

http://aadivaahan.wordpress.com/2011/08/12/crop-circle-craziness-and-thoughts/

Mon, 08/15/2011 - 16:31 | 1562868 Smiddywesson
Smiddywesson's picture

Topcallingtroll conveniently left out that Rome took 650 years to peak from the founding of the republic, so blandly stating that their fall took 200 years to collapse is misleading.  Rome's fall took 30% of the time it took them to peak.  A good argument can be made that our currency society took shape at the conclusion of the Civil War when we went from a collection of states to one super federal entitiy.  If you count backward, 30% of the time period from then to now would be in 1967, one year before the Tet Offensive and only four from our leaving the gold standard.  Now we clearly haven't collapsed (yet) so any upgrades will move our dates closer to that magic 1971 when, in my opinion, we indeed did peak. 

Topcallingtroll might have unwittingly hit on something there. 

Mon, 08/15/2011 - 14:04 | 1562272 scatterbrains
scatterbrains's picture

so if all these hedgies are terminaly bleeding could this cause a domino chain of selling in the only thing that has been making them money so far ?

Mon, 08/15/2011 - 14:04 | 1562277 Catullus
Catullus's picture

And thus why short selling is not the socially repugnant activity it's made out to be. Google bought them because they felt the deal was attractive at this price. The asset was being potentially undervalued. The short seller wears this risk.

Mon, 08/15/2011 - 14:07 | 1562288 SheepDog-One
SheepDog-One's picture

Neither longs nor shorts can whine when their gambling bets go bad! Im sure these guys thought they had everyone else beat, Im sure they thought they had secured inside info for their trades...now they lose OH WELL!

Mon, 08/15/2011 - 16:33 | 1562897 DaBernank
DaBernank's picture

Exactly, if you can't afford to lose $$$, don't put it on the table, bitchez.

Mon, 08/15/2011 - 14:05 | 1562282 topcallingtroll
topcallingtroll's picture

Tyler please let us know which hedge funds are fooked as soon as you can! I live for this! Well......and the riots too.

Mon, 08/15/2011 - 14:09 | 1562297 centerline
centerline's picture

Haven't see you around much lately. This place has been in need of some good trolling from time to time. Someone has to teach the newbies how it is done. Lately it has mostly been Trav coming back and swatting the bees nest.

Mon, 08/15/2011 - 14:07 | 1562286 JW n FL
JW n FL's picture

soooooooo? the deal paid for itself!

gotta love that shit!

I wonder how much bad press google let fly.. not renewing contracts and the like.. before raking in the money to pay for the deal?

pump and dump but backwards!

greedy fuckers are soooooooooooo easy to manipulate.

lambs to the slaughter!

Mon, 08/15/2011 - 14:09 | 1562304 SheepDog-One
SheepDog-One's picture

Wall St has run out of general public to pillage, so now the pirates resort to plundering each other, I think its great!

Mon, 08/15/2011 - 14:09 | 1562292 ToNYC
ToNYC's picture

 

Where's the love? Intellectual Property wars beat Gold wars any old day in the good old US of A.

When you built not thinking anyone's patent was underlying, that miss take does not grant license. So they pay a small fee (maybe 5%) and play ball to keep the ROW coming here to own what they never could in the pirate countries

Mon, 08/15/2011 - 14:09 | 1562300 papaswamp
papaswamp's picture

Motorola has gone down the crapper and makes lousy gear that malfunctions easily. It was a stupid aquisition unless they plan to completely revamp the company.

Mon, 08/15/2011 - 14:17 | 1562336 PuppetRepubl1c
PuppetRepubl1c's picture

I agree i personally would never buy any product with the motorola name on it.  Every single product i have owned from them (cable box, cell phone) has been a total piece of shit.

 

The only logical reason for this acquisition is for google to acquire their patent portfolio so they can lay the smack down on Apple.  The patent war between Google and Apple has now reached Defcon 1.  

 

 

 

 

 

 

Mon, 08/15/2011 - 14:19 | 1562348 SheepDog-One
SheepDog-One's picture

Apple is crap without Steve Jobs, and Google will pretty soon eat their lunch.

Mon, 08/15/2011 - 14:36 | 1562442 trav7777
trav7777's picture

Apple tends to have shitty hardware, or at least stuff that is a bit behind the curve.

WP7 is the wildcard in this race; the interface makes the droid and icrap look antiquated.  MS should buy Samsung

Mon, 08/15/2011 - 14:44 | 1562483 Almost Solvent
Almost Solvent's picture

STARTAC was the only motorola I never had a problem with.

RAZR, other than the form factor, was my last moto

Mon, 08/15/2011 - 14:30 | 1562409 adr
adr's picture

You hit the nail on the head with that one. This deal has nothing to do with hardware or anything Motorola makes at all. It has everything to do with the patent portfolio they hold. There is no new innovation, there are only innovations that exist on paper held by some company somewhere. If you somehow find the right piece of paper you can sue for billions.

I wish I would have learned that I should patent every idea I have in college when we were designing future concepts. Along with my student team we pretty much designed every single smartphone innovation of the past ten years.

I actually made a MP3 video player player I called the I-Pod in 1998 when the iMacs started coming out. I thought it was a cool name and people in my class ridiculed me for ripping off Apple. I kind of got the last laugh sort of. Would have been better if I trademarked the name Ipod in 1998.

Mon, 08/15/2011 - 14:37 | 1562446 trav7777
trav7777's picture

as an IP attorney, I can rain on your parade here...

Mon, 08/15/2011 - 15:26 | 1562650 DCFusor
DCFusor's picture

Don't worry apr, we did it too back in the '70s as well, and if we'd all been such pricks you'd not have been able to patent the obvious, we'd have beaten you to it.

I wouldn't admit to being an IP attorney if I were you, trav.  That's somewhere lower than dirt in this day and age.  Goys like you are why I quite innovating and just retired.  Not worth it anymore when some jerk can do a submarine patent, and add the claims after he sees someone actually make the tech practical, then come out of nowhere and steal someone's life work.

Mon, 08/15/2011 - 15:48 | 1562710 trav7777
trav7777's picture

priority only extends to the claims, dude.  and without a working embodiment, you have nothing.  As we are still a first-to-invent system, you have nothing here to hang your hat on other than you are a loser

Mon, 08/15/2011 - 14:22 | 1562369 Boilermaker
Boilermaker's picture

SURPRISE!

Don't worry, you know it's legit and just coincidence because the SEC protects investors against illegal shit.  Honest.  They really do.

Mon, 08/15/2011 - 14:27 | 1562388 Cdad
Cdad's picture

Apparently, one stupid move is setting off another series of stupid moves, namely that of paying up for ANY STOCK AT ALL at the end of a 100 point S&P quant ramp.  Brilliant! 

I'm starting to think the short sellers are EQUALLY as dumb as the long only criminal syndicate Wall Street bankers.  This is a market of morons.

Selling the long side of the book to anyone one dumb enough to buy it from me.

Mon, 08/15/2011 - 14:59 | 1562545 KingdomKum
KingdomKum's picture

over 17,000 patents were part of the deal  .  .  .  

Mon, 08/15/2011 - 15:51 | 1562722 Ponzi Unit
Ponzi Unit's picture


Hey, can anyone please supply the link to the ENGDAHL piece on Rockefeller, oil, empire, and global finance?

Mon, 08/15/2011 - 16:33 | 1562899 Sokhmate
Sokhmate's picture

Most probably not.

Mon, 08/15/2011 - 23:39 | 1564016 IMA5U
IMA5U's picture

hedge funds still half of the month left to pile on risk and make their month

 

it aint over till its over

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