Option Millionaires

[MNYC]

SHLD: Rips and ends up green yesterday on very bad news. The world is upside down folks!

But this is most likely the reason:

If there was no good reason for the stock to surge yesterday, then today's afternoon spike was even more inexplicable.

Unless of course some shorts are being goaded to crowd the exit.

1) Bloomberg says as of Dec. 30 short interest amounted to 12.4 million shares, which was 38.4% of the free float - arithmetically calculated at 37.0 million shares.

2) As of the Oct. 29 financial statement, 107 million shares were outstanding, indicating that 70 million are locked up. 64 million of these are held by Lampert and Berkowitz entities (as of September 2011).

3) The stock fell by over 20% on low volume in November, and the decline intensified in December on higher volume.

4) The numbers above are all rough, and we dont know the score on net shorts since Dec 30. Be that as it may, if the company doesnt exhibit signs of bankruptcy (or get pushed there a la CIT) in the near future, there could be great demand for shares relative to a small supply.

5) Granted the retail market overall is weak, the company's business model and its facilities are abysmal. Nevertheless, the stock price has been susceptible to short-term manipulation in the past.