What's up Superstonk, back again with another update. I got two more responses from Ortex and I think I got some good info. See below responses and then I'll sound off at the bottom and leave some thoughts. These emails continue directly after the first two in my post from yesterday here. Read on anon.
I'm glad we could help. To answer your questions:
Q: Would it be possible for you to provide a list of the agent lenders, prime brokers and broker-dealers that make up the combined pool that provides Ortex its lending and short interest data?
A: Unfortunately not. We receive data via partners that provide industry standard securities lending management tools to the market. One of the conditions of the distribution of data is that it is anonymised as, understandably, borrowers and lenders have concerns about competitors being able to discern and analyse their lending/borrowing patterns.
Q: Could you provide me with a list of the other stocks that were affected by this ‘phenomenon’?
A: We haven’t attempted to quantify the issue or identify all of the stocks that were affected. When we sampled a number of stocks yesterday, there were sufficiently many that we approached it with our partners as a widespread problem. We expect the number of affected stocks to be at least 1000.
(The support agent didn't include my questions but I had asked if they were going to correct or fix the data since they saw this as a 'phenomenon' and another ape asked about the date of the first 'phenomenon' so I tossed that in as well)
We will not correct the underlying data (e.g. shares on loan) as that is what was reported, but when we correct for this in our Short Interest estimation algorithm, it will apply to all estimates, past and future. I do not have a timeframe for any such correction at this time.
As for the dates last year, you can see this on the chart for ‘On Loan’ for GME - it was June 13th, 2022.
Now, I had already looked at the chart and found that the date was June 13th but figured I'd ask anyway in case it got me some extra info. It didn't but whatever. Now here's some screen shots for you guys cuz you know I love screenshots.
Friday June 10th
Monday June 13th
Friday May 26th
Monday May 29th
Now, the cool shit I realized, and I think you probably realized about a second ago, both 'phenomenons' happened on a Monday. Also, the amount of shares that were "returned" are almost equal HOWEVER there is a slight change. The amount that was "returned" on Monday May 29th INCREASED by 120k shares.
85.25-69.29=15.96 million shares "returned"
71.59-55.51=16.08 million shares "returned"
16.08-15.96=0.12 million shares or 120,000 additional shares
So not only did both of these 'phenomenons' happen on a Monday but the shares "returned" are almost identical but with a slight increase from June to May. Does this mean that someone rolled a position that is either borrowed shares or, more than likely, is short those shares and tried to buy themselves one more day? I have no fucking clu...... wait, maybe I do have a fucking clue.
If we look back at the first email I received yesterday the Ortex agent said, " A drop of Short Interest, even though markets are closed, is not unreasonable. In order to return a share, it must either have been borrowed and not sold short, or borrowed, sold, and repurchased. In the case of the second option, the trading volume would have to be at least two days prior in order for the trade to settle."
BUT HOLD THE FUCK ON.
They also said in the next email that " The drop in reported stock lending did occur, but is most likely to be administrative rather than relating to a change in Short Interest. That means that this should not have been reflected by a change in Short Interest. The fact that these very large changes occurred on a holiday indicates that all/almost all of this should have been ignored (although this ‘phenomenon’ and the absolute scale of it would be harder to distinguish if we observed a change like this on a trading day)."
So my relatively smooth ape brain is coming to a couple conclusions. First, "In the case of the second option, the trading volume would have to be at least two days prior in order for the trade to settle." Let's look back two days to Thursday May 25th. Volume was 2.49m shares. Well we saw a drop of 16.08m shares so that doesn't fuckin add up. Second, the Ortex agent confirms that Short Interest shouldn't have dropped, it was a position being rolled over and completely administrative and should have been ignored. IMO, I think this was a short position being rolled over and something slipped through the cracks that wasn't supposed to.
Another point to note since I'm Utilization guy. Utilization in June was not affected during that 'phenomenon', but it was during the 'phenomenon' this past Monday. If we remember back to the first email I got back yesterday, Ortex let me know that due to a data cut off the data was captured even though it shouldn't have been. So it's possible that back in June, the data was not captured for utilization because it was in, resolved and ignored before the data cut off. I'm just speculating here at this point because I don't know fully how that all works, but whatever, just some thoughts.
That's all I got for now and all I could throw together in the middle of the work day, so my bad if its all over the place. Back to the grind, it takes money to buy whiskey.
Oh and don't worry, daily post coming shortly.