"How likely is it that they will want to surrender their holdings at current prices?"
Didn't JCP just do exactly that - surrender 7 million shares? This information is according to a poster @ sanok who contacted the company - > Post #:23124890 - and the company said..
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I've just received aresponse in regards to recent SP fall:
I refer to your enquiry asking why the company has not formally responded
to the market on the recent share price fall. The recent fall is largely due to
- hedge funds shorting the stock and secondly - a fund selling 7m shares
Best
John
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Interesting that the change in substantial holding occurred on the 27/2 with the "transfer" of 7 mil - the spread was a high of $3.15, low was $3.02 - and after that the sp started to decline to it's current level.
Perhaps JCP know there will be a cap raise soon to raise the $50mil extra facility and to part fund the BAM spherical graphite plant in the US. They know it will probably not be at a premium, and have decided to sell now & pick up their allocation at a lower price - make up for the last CR where they all paid top$. I understand most indexed funds participate in new share offerings so that they maintain proper weightings of various stocks in their portfolios. Could a few others doing likewise and, others covering with shorts?
Shortman is reporting 11.60% being the position as at 1st March with at least another 3 mil shares added to the shorts since then.
Another possibility is what I think @jupiter2014 is alluding to when he talks about a t/o on the cheap - is SYR being targeted by overseas "activist" hedge funds?
In the past most of these activist hedge funds have focused on companies in the US, then moved into Europe and Japan. More recently they are said to be looking at ASX listed companies - taking up positions by "stealth" under the 5% mark, and doing so as cheaply as they can - possibly even by shorting? Clearly the level of short activity over the past week is such that it's someone with very deep pockets.
Those activist hedge funds operate by stealth over a great many months before making their intentions known, and mostly will already have garnered the support of at least another large holder, ensuring they have enough stock/votes prior to making a move.
From the Harvard doc linked below......
"Many activist attacks are designed to facilitate a takeover or to force a sale of the target, either immediately or over time"
and one of the attack devices used by activists.....
"seeking to force a sale by leaking or initiating rumors of an unsolicited approach, publicly calling for a sale, acting as an (unauthorized) intermediary with strategic acquirers and private equity funds, taking positions in both the target and the acquiror, making their own “stalking horse” bid or partnering with a hostile acquirer to build substantial stock positions in the target to facilitate a takeover"
The volume that has gone thru in recent weeks is much larger than normal, yet there has not been any new substantial holder notices, apart from two existing holders JCP/MQG.
Some reading on these "activists" below.
All just IMHO. Suggest you keep an open mind to the possibility - particularly since that mysterious Viceroy Research document surfaced recently.
(20min delay)