Third time lucky

Interesting post Volvo ... gut feel is you are probably right. We've been getting much more frequent updates from the new management and they obviously are trying to get the price up, for reasons I discussed I think they will outperform market expectations at the operating level, and the contract wins are mentioned briefly on their website!

I do wonder why there hasn't been any RNS if this holder has been making significant sales. Also, the short interest has been steadily decreasing but still stands at around 9% of the shares outstanding, and about 25% odd of the actual free float! thats pretty substantial. I can only imagine this is part of the convertible arbitrage trade, but (from memory) there is only about £60m of convertible debt available whereas the short positions represent about £50m, but, without doing any in-depth calculations, the majority of the value of the convertible is likely to represent the debt so the option value (convert value = debt + option) will be substantially smaller, call it £6m. To hedge a call option, you go short a proportion of the stock (delta * the stock which the option is over); in order to think about this further I'd need to look at the specifics of the convertible bond option i.e. how many shares is each option for? also would need to know the delta, although it varies between the value of zero and one so that puts a cap on it. I won't bother because this idea is entirely speculative after all!

B