Looks like shorts are having a tough time finding shares of Baidu to short (which isn’t at all surprising given the tiny float). The money quote:
Short sellers are licking their chops over Baidu.com Inc. with the stock still more than three times its initial public offering price even after ending down everyday but one since its spectacular debut.
But nearly a week after the IPO, finding shares of the Chinese Web search engine to borrow and sell short is proving a major challenge, and those that are available command a hefty fee.
“It’s very hard to get,” said one short-seller, who spoke on a condition of anonymity. He said he’d been trying to borrow the shares since they began their rocket-ship ride to $153.98 on Nasdaq on Aug. 5, their first day of trading.
Another trader who takes both long and short positions in stocks said that lending desks he’s dealt with have told him that Baidu shares would be available to borrow — but at an annualized interest rate of more than 50 percent.
“I’ve never seen something that high,” he said.
Typically, short sellers are paid a small interest fee when they borrow shares.
Comments on this entry are closed.