Replies to post #184735 on Amarin Corp Plc (AMRN)

[oneragman]

dan, it seems that Friday night/yesterday people were of the opinion that maybe the shorts were moving away from AMRN as risks associated with shorting are becoming to large...allowing the price to move up. What do you see?

[jfmcrr]

I have a friend who’s an activist at a large hedge fund (meaning their strategy is to buy 5-10% of a company and get on the board of directors and impose what they think will help the company appreciate).

The companies he’s buying are blue chip, 100-200bil companies, and they acquire slowly, over weeks. He estimates him buying 3-5% of a large, highly liquid company (S&P 500 sized) usually moves the stock 5-8%. For a company like amarin, buying 3-5% would probably move us 12%+, and trying to buy over 10% would cause us to add 50% in a day. We don’t have enough large players playing both sides consistently to provide that liquidity. Remember, most shares you buy or sell are going to a market maker, and he’s trying to lay off the risk elsewhere. After a certain point they turn around and hack their position and stop providing liquidity one way, and that’s when you see the massive moves.

Thanks. Concept and magnitude.

[Sabre2870]

Dan. Thank you for the reply. Unfortunately I am going to have to try to break down your answer to try to understand it. I thought we just had a 14 million share day on Thursday and the share price only moved 40 cents.