A correspondent writes in:
Down to 85.8 million shares:This is a horrible short idea. One of the most important things to avoid in a short idea is a company that is a buyout target. The nice thing about shorting a company with distressed bonds is you know that any acquirer would look to take control buy buying the bonds instead of the stock.
Recent short interest history (with stock price in parenthesis)
April 30 – 67.2MM ($18.44)
May 15 – 85.2MM ($14.65)
May 31 – 94.5MM ($16.90)
June 15 – 90.1MM ($18.10)
June 30 – 85.8MM ($18.60)
What happens if the shorts start to think a buyout is on the table? What are the odds the board announces they are looking at strategic alternatives when they report Q2? What are the odds anyone cares if they do?