Quindell (QPP) the short squeeze continues

Interesting month for QPP, the share price seems to have been pretty static, however the underlies some important aspects as we move forward.

Roble increased their short holding to just over 4% and notified the FCA on the 7^th 8^th of May.  It seems fairly clear that this was behind the decline at the start of the month. QPP also continues to be the only company that Roble has shorted in the last 12 months. Once the Shorting shares had been sold the SP however quickly recovered back to the 20p level.

This gives us a few clues as to what’s happening. Firstly Roble do not want the SP to gain momentum and rise above 25p. Secondly Support seems to exist  around 19p-20p no matter what the shorters throw at the company.

4% of the company means that Roble had 41m now of stock to find, every 10% increase in the SP is an extra £4m they will need to find to fill their order. A few people have said that Roble have hedged against a rise in the SP, by buying their stock at this current level…Not sure I believe that as it would mean a notifiable holding under the FSA rules (even with qualifying instruments).

So Roble are heavily exposed and are struggling to keep the SP where they need it. UK shorting my well known UK shorters, has I am informed been reduced with a buy back occurring mid month.

So Roble have 240m shares now to close their short and don’t want the SP to go above 24p….2+2 does not equal 10, so this isn’t going to happen.

Avg Daily vols last week were around 30m with 15m buys.

Make no mistake if the SP rises to 22-23p Roble will be experiencing a bit of stress. Apart from a collapse of the share price, Roble will have to run the Gaunlet of a short squeeze, up to 3p5 maybe even 40p

I am long btw and happy to be so J