MEL - Meridian Energy

[Maxtrade]

https://www.nbr.co.nz/story/blackroc...rce=Heads%20Up

Another take on it.

Will be great to watch how this plays out. Although my bias is obviously further downside, one must always be mindful of other possibilities (especially when shorting). With this being so public and so many people thinking the same thing there is the very real possibility of a scenario where shorts get trapped and squeezed.

Hence I just let price action dictate what I do.

Still a long way to go before shorts experience any potential squeeze with that immense volume of shares to be sold off. SP have rebounded a little but still highly likely to take another dive over the next week as we approach sell off date, or on the day of.

[see weed]

Still a long way to go before shorts experience any potential squeeze with that immense volume of shares to be sold off. SP have rebounded a little but still highly likely to take another dive over the next week as we approach sell off date, or on the day of.

SP up 60c in last week.

[bull....]

should be under 5 soon , see morning star have a 3.90 price valuation

was thinking it would go under 5 but it triple bottomed around this level instead. must been all those shorts buying back lol

[JohnnyTheHorse]

Interestingly Blackrock has only sold around 2m shares so far. 87m to go...

[Snoopy]

Interestingly Blackrock has only sold around 2m shares so far. 87m to go...

Blackrock aren't stupid. Hmmm let me rephase that. Blackrock are stupid as evidenced by the fact they paid up to $9.50 for MEL shares in a 'buy at any price' shopping spree. But I imagine they have learned from this, so won't be stupid twice. Blackrock has 87m MEL shares to sell and they know that the market knows this. So imagine you are that Blackrock manager with a flaming shirt from when you bought all those MEL shares for up to $9.50. Now imagine you have not been sacked (that is the part of this narrative that is hardest to believe). Thinking like a Blackrock manger, what would you do?

Well, Blackrock have other funds. So the first thing I would think about doing is moving those surplus MEL shares from the Blackrock ESG fund to another Blackrock fund. A fund that specialises in trading situations. No announcement to the stock exchange would be needed if they did this because the overall Blackrock shareholding would not change. 'Blackrock' could then go beyond the April 19th share resettlement square up date, The shorters would then panic with the share price not diving, driving the MEL share price up, At that point the Blackrock trading fund could do a couple of things.

1/ Offer parcels of MEL shares to NZ managed share funds at a small discount to the surging market price. That would keep the trading 'off market'. Furthermore the NZ funds would 'get a bargain' as the predicted sell off did not occur and they bought below the current share price surge peak.

2/ Offer some shares into the surging market themselves.

Effectively Blackrock would be 'playing the shorters', staying one step ahead of the shorters game. This strategy wouldn't get all Blackrock's money back. But it would minmise the damage. And as a Blackrock manager, 'I' just might save my job. What do others think? Is this an escape path for Blackrock?

SNOOPY

[JohnnyTheHorse]

It's a passive index fund though... Does Blackrock really care what price they sell them at? I wouldn't think they could sell shares in an ETF to themselves due to conflict of interest. But I agree with the sentiment that Blackrock will do what they can to profit from this.

[stoploss]

Blackrock aren't stupid. Hmmm let me rephase that. Blackrock are stupid as evidenced by the fact they paid up to $9.50 for MEL shares in a 'buy at any price' shopping spree. But I imagine they have learned from this, so won't be stupid twice. Blackrock has 87m MEL shares to sell and they know that the market knows this. So imagine you are that Blackrock manager with a flaming shirt from when you bought all those MEL shares for up to $9.50. Now imagine you have not been sacked (that is the part of this narrative that is hardest to believe). Thinking like a Blackrock manger, what would you do?

Well, Blackrock have other funds. So the first thing I would think about doing is moving those surplus MEL shares from the Blackrock ESG fund to another Blackrock fund. A fund that specialises in trading situations. No announcement to the stock exchange would be needed if they did this because the overall Blackrock shareholding would not change. 'Blackrock' could then go beyond the April 19th share resettlement square up date, The shorters would then panic with the share price not diving, driving the MEL share price up, At that point the Blackrock trading fund could do a couple of things.

1/ Offer parcels of MEL shares to NZ managed share funds at a small discount to the surging market price. That would keep the trading 'off market'. Furthermore the NZ funds would 'get a bargain' as the predicted sell off did not occur and they bought below the current share price surge peak.

2/ Offer some shares into the surging market themselves.

Effectively Blackrock would be 'playing the shorters', staying one step ahead of the shorters game. This strategy wouldn't get all Blackrock's money back. But it would minmise the damage. And as a Blackrock manager, 'I' just might save my job. What do others think? Is this an escape path for Blackrock?

SNOOPY

Snoopy I think you have missed one scenario ,the "special trading fund" could come in and buy shares on market , burning the shorts .... then start to off load to them
at prices closer to their average buy in .

[Maxtrade]

It's a passive index fund though... Does Blackrock really care what price they sell them at? I wouldn't think they could sell shares in an ETF to themselves due to conflict of interest. But I agree with the sentiment that Blackrock will do what they can to profit from this.

Agreed, it is just how passive index funds work. Yes that would be a conflict of interest, they won't want to mess with trying to do anything like that. They will see gains where they reallocate the proceeds of these shares selling off anyway. It will balances out for them, rather than them worry about getting their hands dirty with potential conflict trading actions and reallocation to other funds they own to sell through.

They will just rebalance and offload shares through brokers, institutional funds, and overflow to market. We didn't short, but holding off the urge to buy now, will hold nerve and wait for mid next week to feel confident to further increase CEN and MEL to our portfolios. Why not capitalise on Blackrocks unfortunate position. These opportunities do not come up often in the favour of investors looking to increase their portfolios in a stock.

[ratkin]

Agreed, it is just how passive index funds work. Yes that would be a conflict of interest, they won't want to mess with trying to do anything like that. They will see gains where they reallocate the proceeds of these shares selling off anyway. It will balances out for them, rather than them worry about getting their hands dirty with potential conflict trading actions and reallocation to other funds they own to sell through.

They will just rebalance and offload shares through brokers, institutional funds, and overflow to market. We didn't short, but holding off the urge to buy now, will hold nerve and wait for mid next week to feel confident to further increase CEN and MEL to our portfolios. Why not capitalise on Blackrocks unfortunate position. These opportunities do not come up often in the favour of investors looking to increase their portfolios in a stock.

Maybe the opportunity has passed? Another example of fear of the selloff being worse than the actual event itself.

[Hoop]

Maybe the opportunity has passed? Another example of fear of the selloff being worse than the actual event itself.

Hmmm ..a great example of a conflict between a fearful media and a favourable TA..

TA has been showing a bullish divergence these last 6 weeks which says the high number of buyers were optimistic of a possible bargain in the near future.. not fearful as the media lead us to believe..

If I believed in Conspiracy Theories this would be a candidate.

Previously I wrote on this thread that I believed MEL's value to be between $4.00 to $5.00..but the recent market behaviour indicates the price should be a lot higher than that..

TA says buy

Disc: have no MEL

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