Universal Display Needs New Catalyst or the Fat Lady is Going to Sing $OLED

Universal Display Corp is the subject of a rather loud and rude shouting match between Bulls and Bears. Much commentary is emotional and I mean emotional. Lots of traders are locked in deep; very deep. The emotional attachment is too strong and will only acerbate volatility in the near future.

The Bears claim the emperor wears no clothes and this will all collapse sooner rather than later. They point to an SEC investigation of accounting for payments from Samsung. We’ll see.

The Bulls claim the technology is fantastic and we are going to the moon.

The forward PE is astronomical at around 31. So what’s left. A huge takeover offer at a big premium should have already happened if the technology is so great.

The short interest has dropped by about 4.46%. The overall short level is a snick over 8 million shares. The ratio of short to public float sits at 23.96%. The nascent bullishness of a big short position is dropping but still not out of the danger range for the shorts.

While the company is making positive announcements nothing has succeeded in moving the stock north of $40. If the company cannot serve up some event-driven circumstance the stock will have a hard time justifying higher valuations. Excitement will wither and the stock will drift then drop down.

RSI looks like a car driving over a cliff.

Looks like the shorts and bears will prevail unless management can sting them somehow. Given the scrutiny management needs to come up with something very very good.

George Gutowski writes from a caveat emptor perspective.

SEC Edgar suspension unacceptable Document Destruction smoke screen #SEC #edgar #irchat #corpgov

United States Securities and Exchange Commission

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So we have an earthquake on the eastern seaboard. Totally not used to this. At least not like in California. So the Securities Exchange Commission [SEC] freaks and shuts down Edgar. Another example of how SEC fails to serve. Strong democracies need strong capital markets. Excellent capital markets thrive on timely and accurate information.

Edgar was not up to the challenge. Could be good cover for the document destruction scandals.

Watch for another budget fight as SEC asks for money to become earthquake proof. Waiting for someone to sue SEC for inadequate something or other.

Disclosure: George Gutowski writes from a caveat emptor perspective. I am not earthquake-proof but I do value a reliable regulatory environment.

SEC Sucker Punch


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PETER LATTMAN reports in Dealbook that the SEC has brought charges against several trainmen employed by Florida East Coast Industries when it was taken over by Fortress Investment Group in 2007. The two individuals noticed all these strange suits checking things out in the yard. they figured out that it was Fortress (FIG) that was going to buy so they got in front of it.

SEC says that is very bad.

Now if you see two guys having lunch and they look like they are agreeing to something and then they shake hands is that insider trading. SEC is going to say yes.

Disclosure: No position in any stocks mentioned in this post.