14th August
Total Myer Daily Volume = 1,909,878
ASX Daily Short Sell Report = 1,147,008 units short sold
% Daily Volume Short Sold = 60%
Amongst other things, shorters have the ability to easily influence sentiment by the selling pressure they are able to apply to a stock. This pressure can easily scare the average punter out of their position which assists in making the short position profitable.
The chink in their armour is the recent accumulation by Perpetual, it's much more difficult to scare a fund into selling (especially a value investing one) than the normal retail punter. A large fund accumulating can directly negate the selling pressure. The problem the shorters are going to run into is likely to be a supply issue. After all, there is only so much stock available via securities lending agreements that these companies can get their hands on and with shorts already totalling 21% of Myer that ceiling must be close. If they run out of stock to short and Perpetual or retail punters continue to buy what do you think is going to happen to the price?
Personally I smell blood in the water. I would be surprised if there hadn't been at least one phone call to the Portfolio Mgr at Perpetual by a company shorting this stock telling them why they are wrong about the outlook for Myer. It's all part of the game.
MYR Price at posting:
$1.32 Sentiment: Buy Disclosure: Held
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