Many solar stocks are likely experiencing rapid short covering.  Sticking around for the lowest prices after serious success is a sucker’s game.  There may also be a political angle here now that President Obama’s poll numbers are looking a bit better.  The problem is that it is going to take more now than a President with a continued favorable stance to alternative energy.  The fundamentals remain weak and now investors are getting to evaluate whether there is any value of if they are value traps.  Take a look at some of the moves…

First Solar, Inc. (NASDAQ: FSLR) is up 7.5% at $49.29 against a 52-week range of $42.50 to $175.45.  The most recent short interest data showed that the short interest was 18 million shares and that was actually down from most reports in the fourth quarter of 2011

SunPower Corporation (NASDAQ: SPWR) is up over 13% at $8.53 today against a 52-week range of $4.94 to $23.36. The most recent short interest data showed that the short interest was 5.7 million shares, down from a November peak of 9.3 million shares and much lower than the 11.7 million shares short back at the end of June.

Energy Conversion Devices, Inc. (NASDAQ: ENER) is even up 12% to $1.29 and no longer at much of a delisting risk.  Its 52-week range is $0.20 to $4.29. The most recent short interest data showed that the short interest was 11.4 million shares at the lowest levels in a year since it had become a penny stock.

Trina Solar Limited (NYSE: TSL), out of China, is up a whopping 24% at $11.44 against a 52-week range of $5.28 to $31.08.  That makes for a gain of 70% so far in 2011 and it would have to almost rise 200% to challenge its year-high. The most recent short interest data showed that the short interest was 15.5 million shares.

MEMC Electronic Materials, Inc. (NYSE: WFR) is also up 8% at $5.78 against a 52-week range of $3.65 to $15.04.  That gives a gain of almost 47% so far in 2012.  The most recent short interest data showed that the short interest was 14.5 million shares and that was actually higher than at the end of 2011 even if it is lower than prior months.

JON C. OGG

We covered the short interest changes for the January 13 settlement date and compared them to the December 30 short interest data and added in other color if applicable.

Alcatel Lucent S.A. (NYSE: ALU) rose to 22.54 million shares from over 18.2 million for a gain of almost 24%.

Bank of America (NYSE: BAC) rose 18.5% to 186.1 million from over 157 million at the end of December.

Dendreon Corporation (NASDAQ: DNDN) saw nearly a 6% gain to 34.76 million shares in the short interest to its highest level in a year.

Diamond Foods, Inc. (NASDAQ: DMND) saw a gain of 12% to 10.46 million shares during its time of accounting woes, but this is still not as large as in OCT/NOV-2011.

First Solar, Inc. (NASDAQ: FSLR) was down only marginally.  The solar leader (and whipping boy) was down again to 18.04 million shares from a reading of 18.7 million at the end of 2011. Be advised that this was FIVE STRAIGHT lower readings in the short interest.

Ford Motor Co. (NYSE: F) was up by 14.7% to 147.1 million.

Green Mountain Coffee Roasters, Inc. (NASDAQ: GMCR) remains a battleground stock and the uptick was less than 1% to 26.489 million shares in the short interest.  That is still down about 10% from last year’s peak.

Human Genome Sciences, Inc. (NASDAQ: HGSI) posted another rise in the short interest to a new year record of over 32.2 million shares in the short interest.  So much for loving the lupus drug.

LinkedIn Corporation (NYSE: LNKD) continues to see rising bets against its stock.  The reading was 6.9 million shares short and that marks EIGHT STRAIGHT gains in the bets against the stock.

Netflix, Inc. (NASDAQ: NFLX) may feel after-the-fact now that earnings are out, but the short interest rose by a sharp 25% to 11.422 million shares.  That is the highest short interest reading since last March.  Today’s gains have to be some short covering.

Research in Motion Limited (NASDAQ: RIMM) has had the vultures circling it for some time but this last short interest reading of 36.6 million was down more than 3% and was actually the lowest short interest reading since the end of last July.  Maybe all the short-sale money has been made since the stock fell about 75%.

Sirius XM Radio Inc. (NASDAQ: SIRI) always has a high short interest due to its low price and controversial stock… What is interesting is that the gain was not even 2% in short shares to 305 million BUT… That is the highest short interest since the end of last May.

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JON C. OGG

Short sellers increased their positions in all four of America’s large banks. The short interest in Bank of America (NYSE: BAC) rose 18.5% to 186.1 million. The price of its stock, and most other bank stocks, have risen as it appears that the worst of their balance sheet problems have faded some. Shares sold short in Citigroup (NYSE: C) rose 19.1% to 50.3 million. The short interest in Wells Fargo (NYSE: WFC) was up by 11.4% to 47.1 million. Shares sold short in JP Morgan Chase (NYSE: JPM) were up by 21.5% to 40.6 million.

Shares sold short in the two big car companies also rose. The short interest in Ford (NYSE: F) was up by 14.7% to 147.1 million. Shares sold short in General Motors (NYSE: GM) were up 13.7% to 62.3 million.

The short interest in almost all major tech stocks was up as well. Shares short in Microsoft (NASDAQ: MSFT), which posted relatively good earnings, were up 49.8% to 101.5 million. Shares sold short in Intel (NASDAQ: INTC), which also posted strong numbers for the fourth quarter, rose 12.2% to 131.8 million. The short interest in Dell (NASDAQ: DELL) was up by 6.1% to 69.9 million. Shares sold short in Oracle (NASDAQ: ORCL) were up by 40.8% to 27.4 million.

Douglas A. McIntyre

The Seattle-based biotech announced sequential revenue growth for the fourth quarter ended December 31 of approximately 25% to $82 million, above the consensus estimate of $72 million. For full-year 2011, Dendreon said sales of Provenge (sipuleucel-T) would total approximately $228 million. Gold credited an improved Provenge reimbursement landscape and ongoing physician education initiatives for the stronger results.

Investors were initially bullish on the growth prospects  of the vaccine, which was approved in April 2010 for the treatment of advanced (hormone-refractory) prostate cancer. And with good reason: The first therapy in the U.S. designed to induce the body’s own immune system to attack prostatic tumor cells, Provenge’s side-effects are less toxic than traditional chemo-based treatments for advanced prostate cancer, such as Sanofi’s (NYSE: SNY) taxotere (docetaxel). And, unlike the plethora of drugs in the treatment paradigm for metastatic, castrate-resistant (hormone-refractory) prostate cancer, such as AstraZeneca’s (NYSE: AZN) Zoladex or Abbott’s (NYSE: ABT) wildly popular Lupron injection, Provenge does not focus on reducing testosterone levels, the male hormone fueling growth of tumor cells.

From a high of $42 a share in April 2011, the stock price tumbled more than 80% last fall after the company withdrew prior guidance of $400 million in annual sales, the result of prolonged delays in federal and private insurance reimbursements.

“It’s not what we don’t know that hurts us, it’s what we know for certain that just ain’t so.” ~ American author and humorist Mark Twain

Analysts attribute the dramatic spike in Dendreon’s stock price to the positive shift in insurance coverage — including a reduction in average time to payment of less than 30 days for providers. “We believe that this progress may help clear some of the fog surrounding the Provenge sales trajectory,” said Joseph Pantginis, Roth Capital Partners.

An oft-repeated tragicomedy that befalls investors is how the unabashed certitudes of Wall St. dissemblers result in trading losses for those of us who pile into stocks after the “good” news is out. Not to pick on Pantginis exclusively, but improving trends in reimbursement for Provenge is old news: In a 10Q Detective column posted last November, I noted that CEO Gold had previously mentioned that average (insurance) reimbursement times had fallen from “90 days down to 30 days.”

Though I do not doubt prescription uptake of Provenge by urologists and oncologists is trending higher (read my bullish article, posted on November 17, 2011: Dendreon Buyout, How Imminent?), more likely, the breathtaking climb in Dendreon’s share price was unintentionally engineered by short-sellers closing out open positions. According to NASDAQ, short interest in Dendreon common stock was 31.3 million (as of December 15), about 21% of the stock’s float.

Further exacerbating a combustible trading environment, days to cover had jumped to seven, from 3.9 the month prior.

Need more convincing evidence that Dendreon’s stock price overreacted to acknowledged “modest” growth expectations? On Thursday, January 5, approximately 44.9 million shares changed hands, a 700% increase over its 65-day average volume.

Looking to go long Dendreon stock? Free advice — stand clear, at least for now.

David Phillips

Related Posts:

Dendreon – Not Running Out of Cash

Dendreon Buyout, How Imminent?

The short interest as of the November 30 settlement date rose more than 11% to  294,696,977 shares versus a reading of 263,937,182 shares based upon the November 15 settlement date.  What is interesting here is that this represents the highest short interest in the number of shares since back at the July 29, 2011 settlement date and it appears to be the third highest short interest reading for the stock in all of 2010.

It was just on December 9 that SIRIUS XM was rated as the Bull of the Day in a very positive upgrade by Zacks Investment Research.  Citigroup had also raised its rating to “Buy” with a $2.20 price target objective.

Maybe the short sellers thought that the holiday sales and retail were going to be weaker than what we have so far seen this holiday season.

SIRIUS shares are up about 1% so far today at $1.765 versus a 52-week range of $1.27 to $2.44.

JON C. OGG

We tracked unusual short selling moves, gains and drops, in the following companies: Amazon.com, Inc. (NASDAQ: AMZN); Apple Inc. (NASDAQ: AAPL); Diamond Foods, Inc. (NASDAQ: DMND); Focus Media Holding Limited (NASDAQ: FMCN); Green Mountain Coffee Roasters, Inc. (NASDAQ: GMCR); Groupon, Inc. (NASDAQ: GRPN); Intel Corporation (NASDAQ: INTC); Netflix, Inc. (NASDAQ: NFLX); and Research in Motion Limited (NASDAQ: RIMM).  We have added in the data and provided color if applicable.

Amazon.com, Inc. (NASDAQ: AMZN) saw a drop in the short interest despite the building pressures we have been seeing around margins, Kindle margins, and valuations.  This short interest fell to 10,960,797 shares in mid-November versus 11,041,106 shares short at the end of October.

Apple Inc. (NASDAQ: AAPL) saw another drop in the short interest to 9,440,115 shares short in mid-November versus 10,683,440 shares at the end of October.  This is actually the lowest short interest since mid-January.

Diamond Foods, Inc. (NASDAQ: DMND) has been under increased fire for its deal delay after an accounting inquiry into payments to Walnut farmers and now due to the death of a board member that may have been integral in the situation.  The Short Interest for mid-November was up close to 10% to 12,128,071 shares, but take note: THIS WAS THE TENTH CONSECUTIVE RISE IN SHORT INTEREST!

Focus Media Holding Limited (NASDAQ: FMCN) was recently hit hard by the Murky Waters group who was short, but the increase looks big on the surface until you compare it to the past.  The short interest rose to 5.54 million shares short versus 4.27 million shares just two weeks earlier.  This was over 10 million as recently as August 31.

Green Mountain Coffee Roasters, Inc. (NASDAQ: GMCR) remains under fire by short sellers as the mid-November short interest was 27,261,029 shares versus 24,748,979 shares at the end of October.  This was the highest reading since January 14.

Groupon, Inc. (NASDAQ: GRPN) already had 2,919,091 shares in its short interest as its first-ever report in the short interest.  That is a highly shorted stock and it now has options.

Intel Corporation (NASDAQ: INTC) was recently added as a huge position by Warren Buffett, a very unusual play since Buffett has avoided tech in the past.  This was the third consecutive drop: 122.69 million shares versus 131.06 million shares.  Oddly enough, the short sellers had already made their bets without knowing a single thing about Warren Buffett’s involvement due to trade-dates versus when we knew about the position.

Netflix, Inc. (NASDAQ: NFLX) saw a substantial drop in the short interest from late October to mid-November: 8,870,727 shares versus 9,285,174 shares, although trading volume was down lower so the days to cover was actually higher at 1.35 days versus 1.0 days.

Research in Motion Limited (NASDAQ: RIMM) saw a small drop in the short interest yet this remained the second highest in months and months.  The mid-November short interest was 44,658,200 shares versus 46,371,993 in late October.

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Jefferies has taken more aggressive steps to thwart the negative news flow than other firms have, but so far it seems that all “facts” are being taken as fiction.  Management has now released detailed data yet again outlining its exposure to weak spots in Europe to try to thwart the efforts of a short selling group.  This starts out “We are writing so that every one of our key constituencies receive the facts and reality directly from us, instead of being misled by half-truths, false rumors and lies being disseminated with malice by a group whose interests are absolutely opposed to yours and ours…”  The firm tries to address every concern out there in that letter.

Jefferies is buying their own paper when and where it can: “As an aside, we note that we repurchased $50 million of our 2012 bonds in the past few weeks and over time, as part of our announced 20 million share-buyback program, about 5 million shares of Jefferies common stock in the open market.”

Regulators make brokers, traders, fiduciaries, and managers record and store instant messages, phone calls, and instant messengers for a reason and that reason is presumably not to just keep these firms buying up more and more data space in storage farms.  If everything that Jefferies is putting out is true, shouldn’t Jefferies be out suing the malicious group(s) AND demanding that regulators conduct an instant crackdown by skimming every instant message, email, and phone call that revolves around every short sale in Jefferies?

Short selling in general is not a bad thing.  Still, it is one aspect of the market that many investors consider a dirty trick or a shell game, but it has many positive effects as far as the overall market is concerned.  The problem is when short sellers attack and then get to become activists against a company.  Disseminate bad information to keep pushing a bet against a company is one thing, but if it is proven to be false and malicious it crosses the line.  At some point, the definition of freedom of speech becomes no different from yelling “Fire!” in a crowded theater.

Jefferies was down 2% and more a while ago and shares are currently down 0.2% at $10.14.  The stock hit a low of $9.60 earlier today and the 52-week trading range is $9.50 to $27.12.

It seems unreasonable that any of the large trading houses would demand that clients who want to hold Jefferies shares make the designation that their shares cannot be borrowed and also demand that the Jefferies shares not be held in “Street Name” as most shares are.  That might act as a buffer to prevent short selling a bit more, and perhaps Jefferies could try to make it more expensive to borrow the stock.  We were told by one trader that the cost is 275 basis points for a borrow, which is no barrier to shorting the stock if someone with deep pockets believes that an implosion or close to it is further heading toward Jefferies.

Jefferies was above $16.00 in August and shares were again under $10.00 earlier today.  We will ask this pointed question, but it is assuming that Jefferies is not selectively eliminating all of the bad things that it is being accused of… If regulators cannot prevent an unwarranted ‘run on the bank’ in the midst of this regulatory climate, what good does it do to just step in with red flags after the fact?

JON C. OGG

CNBC has also just reported that a boutique named Northcoast Securities has issued a SELL rating on the stock.  Apparently they have the same concerns we have on the stock.

There was a BUY rating issued last week and we covered this and many other key analyst calls in the top analyst calls of the week on Saturday morning.

Groupon shares are indicated down 1.2% at $23.95 this morning right before the open.

JON C. OGG

The short interest in Research-In-Motion (NYSE: RIMM), battered by competition from Apple (NASDAQ: AAPL) and Google’s (NASDAQ: GOOG) Android rose 15% to 46.3 million. Shares short in Sirius XM Radio (NASDAQ: SIRI), which recently posted weak subscriber sales, rose 10% to 277 million shares. The short interest in Symantec (NASDAQ: SYMC) rose 29% to 12.8 million

Probably in anticipation of earnings that would push shares lower after a tremendous run, the short interest in Green Mountain Coffee Roasters (NASDAQ: GMCR) rose 45% to 24.7 million. The bet was a smart one. Quarterly numbers were weak enough to push the stock down by over 35%.

Shares sold short in major bank shares moved very little. The short interest in Bank of America (NYSE: BAC) fell 6% to 190 million. The short interest in Wells Fargo (NYSE: WFC) was down 12% to 55.4 million. Shares sold short in Citigroup (NYSE: C) fell 58.9 million.

Stocks under tremendous pressure because the short position was such a large portion of their floats included LinkedIn (NYSE: LNKD) which at 36%. Short interest as percent of float at Barnes & Noble (NYSE: BKS) was 36% The percent of float for newspaper chain McClatchy (NYSE: MCI) was 44 days. For Eastman Kodak (NYSE: EK), the number was 25%.

Douglas A. McIntyre

The company turned in earnings of that were below expectations on weak sales, not a good combination for a high-flyer.  Earnings came in up well over 100% higher at $0.47 EPS on $75.4 million in income and revenue was $711.9 million.  Thomson Reuters had estimates of $0.48 EPS and $760.5 million in revenue. The company is giving more detail on its conference call.

Green Mountain noted that about 83% of its net sales in the quarter came from its single cup brewing system and its recurring portion pack sales.  The remainder came from sales of bagged coffee and revenue from the office coffee services business.  The brewer and accessories sales were up 40% to $115.1 million and the “portion packs” rose 91% to $475.5 million.

The stock has been under immense pressure and it was only getting close to a fair value before the earnings report.  After an earnings miss and with a large bet against it with more slowing of growth is really taking a tool.

The after-hours session reaction has Green Mountain Coffee down a whopping 26% at $49.20 on very active trading.

David Einhorn is probably still throwing high-fives in his office for having close to a double right now.  He is probably going to celebrate with something more than just a cup of coffee.

JON C. OGG