Takeover Update: Short Positions on Cadbury and Kraft

Cadbury:

The short interest (as measured by Percent Shares Outstanding On Loan) for Cadbury Plc (CBY) has fallen 7.73% over the past week and now stands at 1.01%. This is up 94.19% from the 52 week low hit on July 8, 2009. When compared to other Europe Food Products companies, the short base is well below the average of 1.40% for the sector.

Over the past week the Negative Sentiment Indicator (DNS) for CBY saw a small decrease to the second decile. The DNS for the security is now low indicating an decreasing amount of negative short sale sentiment. The Price Squeeze Indicator (DIPS) remained unchanged and continues to be in the first decile which indicates a low probability of a price squeeze. In light of the recent offer from Kraft we’d expect to see the short base fall.

Download the whole report here.

Kraft:

The short interest (as measured by Percent Shares Outstanding On Loan) for Kraft Foods Inc (KFT) has risen 31.8% over the past week and now stands at 0.54%. This is up 54.81% from the 52 week low hit on September 1, 2009. Even though the security has seen an increase in short interest of the past week, when compared to other North America Food Products companies, the short base is well below the average of 4.36% for the sector. Over the past week the Negative Sentiment Indicator (DNS) for KFT was unchanged. It remains in the first decile, indicating a low amount of negative short sale sentiment for the security. The Price Squeeze Indicator (DIPS) remained unchanged and continues to be in the first decile which indicates a low probability of a price squeeze.

Download the whole report here.

Comments

[Marco Hickey:]

Good info to know, thank you.

Sep 09 01:36 PM

[BullnBear:]

I have been playing with the KFT action right now and I’m also very interested in the movement at HSY and CPB based on all of this but shorting KFT at this point seems a bit risky now that the original terms have been announced.

If KFT management gets crazy and ups the bid another 33% as rumored then maybe a short with the right timing makes sense for a session or two but the value the CBY deal brings risk to that short as well.

Sep 10 12:40 AM