News you didn’t see.

A reader sent me notice they received about ARNA that hasn’t made the wires, as far as I know.

On Friday, ARNA will be added to a biotech ETF, which will cause an estimated 1.8 million shares to be bought and taken out of the float.

Also, there are no shares available to short, and numerous calls to return previously borrowed shares.  My friend’s source said the last borrow they saw on this stock had the outrageous negative rebate (interest rate paid on borrowed shares) of 65% (!!!)

Both bullish, but the market speaks for itself.  Does point to a rebound this afternoon with some short covering that could continue tomorrow, followed by a terrible crushing Friday, assuming the FDA does not approve.

Whipsaw seems to the dominant theme of this market, no matter where you are.  Keep those neck braces on.



5 Responses to ARNA News

  1. dreverts says:

    interesting ARNA take by an obesity wonk:
    [note to dreverts… that link does not work… if you send the link via the blowback page, i’ll edit this comment with the corrected link]

  2. Jesse Livermore says:

    I’ve seen that rumor too. I’m not sure it’s true (which ETF would this be?), but even if it is, it’s pretty immaterial. So far today ARNA has traded 53 million shares. Average volume is 10 million. 1.9 million will be a drop in the bucket.

    • hhill51 says:

      XBI is the ETF, according to a bulge bracket firm’s communication with a customer. I give that source high reliability.
      The volume argument doesn’t take daily churning into account, nor the extraordinary rate paid to borrow shares. That says there is truly a shortage of stock free to deliver.
      That said, it only took $10 million or so in selling pressure to get today really rolling, which is bupkus for a billion dollar hedge fund looking to make a $50 million profit on a position established over the past month or so.
      Maybe today’s bounce was all there will be. Maybe not. I still think the true damage will be Friday after an attempt to recover tomorrow, and then the pack of jackals will move on to their next victim.
      Ain’t free markets grand?

  3. CW says:

    Rejected by 9 to 5 vote….no money to be made now on the long side.

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