Below please find an update on the total number of shares and units sold short across the three Atlas Energy entities (as an indicator of how much traction Hedgeye’s short thesis is achieving in the market place once the data includes periods after April 21, which is when Hedgeye began publicly discussing its negative view). The following chart shows the total number of units or shares sold short for each name since April of 2013. The data is somewhat delayed, typically 10-12 days.
(Click to view)
Two week change in the amount of units sold short:
- ATLS: Up 50.7% – New High in Number of Units Sold Short
- APL: Up 4.6% – New High in Number of Units Sold Short
- ARP: Down 1.5%
Even though it is relatively recent, Hedgeye’s short thesis appears to be gaining traction with market participants. I would expect that trend to continue.
If you are a retail investor and playing along with shorting these names, please pay attention to the Ex-Dividend / Ex-Distribution dates so you don’t also have to pay the dividend/distributions. In addition, you should also take into account your additional cost to borrow each security from your broker. Many MLPs are naturally “Hard to Borrow” so assuming your broker finds you units to borrow to short they will likely charge a high rate (for example, APL’s estimated annual cost to borrow is 49.25%!).