SPK - Spark NZ

[Basil]

Many assets are "shorted" all the time, not just NZX shares.

US shares, FX, gold, crypto, etc, etc. Futures and spot. On all kinds of scales.

Shorting does not make TA redundant. Otherwise all TA would be redundant.

It's the market.

Yeap I agree, it is what it is.  I'd wager HGH came in for heavy shorting just before the capital raise at $1.  Sometimes if you like a stock's prospects going forward you have to swallow a dead rat, a huge one can take quite some time to digest, ask me how I know lol.  I've had my fill of dead rats this year.

[LoungeLizard]

Nope - still disagree. NZX is a small exchange and much easier to distort than the US exchange and certainly different to the global pricing of the FX, gold, crypto etc.
If you agree that the point of shorting is to artificially lower the market price, then any kind of predictive tool that requires the market to be behaving "normally" in terms of the buying/selling impulse, is going to be less relevant.

[Basil]

Nope - still disagree. NZX is a small exchange and much easier to distort than the US exchange and certainly different to the global pricing of the FX, gold, crypto etc.

I disagree. There are some really heavy hitters (whales), that operate massive short campaigns on the US markets.

[LoungeLizard]

I disagree. There are some really heavy hitters (whales), that operate massive short campaigns on the US markets.

Let me know which top ten stock in the US has had a 40% drop in its SP over a matter of a few weeks, as a result of short-selling.

[BlackPeter]

If you agree that the extent of the slide has more to do with what now is an acknowledged short selling campaign, then conventional TA analysis isn't really that relevant.

This is a big IF ... and no, I don't. The share price is set by the market. And, sure - Mr. Market gets it sometimes right and frequently wrong ... however - whether individual market participants are long or short does only reflect on their individual believe about the future of a stock, it doesn't change the stock price.

Obviously - if many people think that the price will go down (and subsequently put their money where their mouth is - i..e. short), than maybe, just maybe - these people have a point?

At current SP levels coupled with a still healthy dividend (27.5cps) Spark is a value share, regardless of whether you think there will be a return to growth next year (Spark are forecasting there will be). Capital gain + dividend over the next 12 months looks attractive to my eyes. 

You call a dividend paid out of loans "healthy"? Spark pays more dividends than they generate - and their debt load looks closer to the balance sheet of a bank than of a healthy utility. 2/3rd's of their balance sheet are liabilities, and their NTA is negligible. Healthy? Really?

[KW]

Doesnt really matter if it is shorts that drove the price down, it still wont make the share price go back up afterwards.  The shorts will be sitting in the wings ready to absorb the stock directly from the index funds to close their positions out.  Where are the new buyers going to come from to push the price back up again?

The SPK share price has been falling since FEBRUARY.  Do you really think 8 months of continual selling is just shorts?  The entire reason SPK is being removed from the MSCI is because its share price has fallen so much - so the ship was already on the rocks and breaking up long before the shorts arrived to scavenge the wreckage.

[LoungeLizard]

Doesnt really matter if it is shorts that drove the price down, it still wont make the share price go back up afterwards.  The shorts will be sitting in the wings ready to absorb the stock directly from the index funds to close their positions out.  Where are the new buyers going to come from to push the price back up again?

After the shorting event is over, buyers (including the shorters) buy in. That's how the money is made after all. Once demand/supply normalises, normal pricing resumes. The time frame for that is debatable but normalisation will happen pretty rapidly when it occurs.

[BlackPeter]

Nope - still disagree. NZX is a small exchange and much easier to distort than the US exchange and certainly different to the global pricing of the FX, gold, crypto etc.
If you agree that the point of shorting is to artificially lower the market price, then any kind of predictive tool that requires the market to be behaving "normally" in terms of the buying/selling impulse, is going to be less relevant.

The point of shorting is to make money with a stock where you assume that the stock price will drop. Same as holding a stock and making money with the sum of dividends and capital gains if you assume the SP will rise (or at least hang around).

Neither holding long nor holding shorts changes the share price ... only hype (i.e peoples expectations about the future) does.

[LoungeLizard]

I think it's pretty well understood - or at least I thought it was - that short sellers drive the price lower by increased selling if the demand stays similar. That's what the huge sell off in SPK has done - driven the SP to artificially low levels.

[LoungeLizard]

Fairly normal trading levels today - and the SP goes up 3%

[BlackPeter]

Fairly normal trading levels today - and the SP goes up 3%

Exactly what you would expect at the beginning of the next down leg ... otherwise it would be just a continuation of the old down leg ;

[LoungeLizard]

Exactly what you would expect at the beginning of the next down leg ... otherwise it would be just a continuation of the old down leg ;

Yeah,but no. 3.6m shares traded - still way above historical levels.
Is todays lift the beginning of the next downtrend or are the shorters, having been outed, already closing their positions. Another week of trading will probably tell the story.

[Breezy]

Avg tp price of $4.37 over 9 analysts with an outperform rating, bang on in my opinion.

[Shareguy]

FB latest underperform IE sell $2.90

[Breezy]

FB latest underperform IE sell $2.90

They are one of the nine but eight above them and I don't rate them very highly anyway going by past experience. You know the old rule if you get a whole stack of quotes for some work then chuck out the bottom and top one to start with.