McClatchy (MNI) shares spiked upward in the last minutes of trading Thursday. From the above chart you can see the MNI jump happened just before trading ended.Most newspapers had a good day but McClatchy's increase -- 29.2% in one day -- is unusual. Hmmm.
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UPDATED: From comments, an explanation -- the last minute surge was caused by naked short-selling.
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4 comments:
It isn't only unusual, it isn't real. The last trade of the session was 100 shares @ 1.69. The 30,000 shares that traded at 1608 driving the after hours price to 1.99 was in all likelihood a short covering entered as a buy on close because MNI was placed back onto the Naked Short list. This means that someone has to prove that they actually had those shares to loan should the SEC come snooping.
As of Oct 31, McClatchy has in excess of 20,000,000 shares short outstanding with over 40 days to cover them if every single share they trade on a daily basis went to that purpose. That is just ugly.
3:32 Very informative thanks.
It is the government screwing with investors. Those naked shorts now have to either liquidate or buy MNI to cover their positions and become non-naked shorts.
Don't read too much into this particular jump. There is an incredible tide out there betting that MNI isn't going to make it and clever investors who no longer can be naked in the U.S. can easily shift their cash to another country where they can continue their naked activities. Or they can put their money into puts. There is more than one way to skin a short.
..In other words, it's a dead ( short, skinned ) cat bounce.
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