Well yes, if they have been short from way up there and they are exiting, they have. The question is are they the first of the major shorters to go out, how much do they have, and what is their exit plan? We may get a few of these days.
So you dont want to be short at the bottom. I suspect its like us longs, there is smart money that knows when to be out of the trend at the extremes and dumb money that will stay in the short for way too long (retail shorters). Funds will loan shares to the shorts whilst they can perceive they can make more money that way. At some point near the bottom they will perceive they would be better supporting long positions, they dont want to get caught with the laggard short positions struggling to repay their loans and would want to hold themselves. The price of loaning short shares will go up and this will also exacerbate the pain anyone caught short will find. Whether this is a short exit or somebody coming in long, its clear someone's position on UNS has changed. So is this a pump and dump? skypiliot's note above on funds may provide an answer.
If as skypiliot has said, Frontier has changed its rate its saying the risk cost to them of loaning to a short position is now much higher and that they may have better uses for the shares. Its like the bank lending at higher rates for higher risk investments, they just said shorting UNS is riskier. It still could go further, but someone is saying they are uncomfortable where it is now and they need to do something. Other lenders may also follow suit and the whole short market may tighten further. Also, other major shorters and their backers will be looking at what their peers do. Short positions had only really declined 10% at the last update but the days to cover is back up to 46 days. Perhaps the likelihood of news in the cover window is making it too risky to stay in now as well, since we know any deal or sale is potentially going to add $50m+ to the coffers.
UNS Price at posting:
19.0¢ Sentiment: Hold Disclosure: Held
