$WTW at last report has 17 767 000 shares or 64.42% of the floating (available shares) short. This is an epic recipe with up coming earnings reported end of today as a catalyst for the one thing that puts fear into us short sellers....A squeeze. After hours trading last night saw a 500 000 transaction go through at 4:04 for $15.36. That was one trade for $7 680 000. Why other than the size of the trade is this important? If you look at the chart you will see $15.36 is the bottom of the sell off from $20.
Using the mentality that former support becomes resistance and former resistance support you have a small pocket in the $17 range but skies are clear till $20. This could be a 30% return on your investment as based on the amount of shares trading average it will take 6.2 days to cover. We have hours until the earnings come out and we will see the true power of the Oprah Effect.
Weight Watchers is a well-known weight-management service which gained a lot of attention when Oprah Winfrey acquired a sizable stake in the company. In addition last December, Oprah announced a 10% stake and a board of directors seat.
But let's paint the time line first of the last 6 months of ownership filings
2015-10-21 Artal International S.C.A files 46.3% ownership at 29 443 300 shares
2015-10-28 Oprah declares with options 14.72% ownership 9 875 571 shares
2015-11-06 Cohen & EverPoint Asset Management 5.7% ownership 3 649 700 shares
2016-02-12 FMR/Johnson & Fidelity Low-Priced Stock Fund 32.6% ownership 20 744 100 shares
2016-02-12 First Manhattan Co. 1.23% ownership 78 479
2016-02-16 Capital Research Global Investors 0% Possible short position move
2016-02-16 Point72 Asset Management 3.9% ownership 2 482 595 shares
While these numbers pulled from the SEC filings reported http://www.sec.gov/index.htm may also include yet to be redeemed options.
With everything here put together in my opinion $WTW is a catalyst for a SQUEEZE not a short price action will determine.
