Universal Display Corporation UDC (Nasdaq:OLED) has caught the ire of Asensio. Asensio is known as the King of the Shorts who does his homework before he takes the kill shot. Trigger has been pulled.
Universal Display is engaged in research of Organic Light Emitting Diodes or OLED and has major contracts/relationships with Samsung and Philips.
Asensio has called the arrangements into question and by way of executive summary has concluded the emperor wears no clothes.
Just take a look at the short position history. Several months ago there were approximately 10 million shares short. The position has been covered down to about 8 million. Days to cover fluctuates widely because the underlying trading volume fluctuates wildly.
Q3 results are a surprise loss and management does seem to be tap dancing around some of the issues. Oh while you’re thinking about things it has a 76 PE ratio. so pardon the short community for acting like sharks with blood on the water.
Management could clear this up very easily with an analyst call and or and analyst day and just explain everything. But somehow they do not see the need for clearer communication.
Canaccord Capital who have a pretty savvy reputation have issued a research report calling UDC into question.
Oh and the SEC is investigating UDC’s treatment of Samsung revenues. Always comforting to see the SEC poking around because the story is not believable.
The set up seems to be cataclysmic in the making. when this resolves it will result in a major move. If its nothing a 75 PE ratio will be called into question at best. If the emperor has no clothes the shorts win and the stock crashes and crashes.
Sort of like watching a heavy weight bout for about eight rounds. Then one fighter starts to buckle and goes down. All 15 rounds never get fought.
George Gutowski writes from a caveat emptor perspective.