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INVN short data and Google I/O ?3

10:24 27-May-15


The rebate rate for InvenSense has dropped below 4% today for the first time in recent memory.  Shorted float has been dropping steadily and significantly since March.  At the end of April it was below 23%, and I expect that trend to continue when data is updated again tonight for mid-May.  Twenty-plus percent may sound high, but it is likely not real short positions, and instead the result of institutional range trading and associated hedging.  The rebate rate is the more important figure, and it indicates that longs have been selling/hedging while true shorts are almost done covering.  Yesterday's relatively strong showing in the face of a decidedly down market is consistent with that viewpoint.  As such I expect continued listless trading going into summer, unless we see some new fundamental news, but that doesn't change my positive outlook on the longer-term prospects.

It's slightly possible that Google's I/O conference this weekend will provide some positive news.  As discussed in the last update, Google and InvenSense are certainly headed in the same directions.  The introduction of Brillo will be one more data point to support that statement, and one more eventual market for InvenSense.