• Research

Oct 27, 2016

S3 BLACKLIGHT: Shorts Revving their Engines for Valvoline

Short interest in Valvoline (VVV US), which recently spun out from Ashland (ASH US), has been surging higher since listing its shares on 9/22.  Short exposure rose by an astonishing 92% from $83milllion on 9/30, to $159million on 10/14.   The S3 Velocity Monitor, a measure of the real-time relative change in shorting activity, is now estimating real-time short interest touching $200million.

One possible reason for the significant short interest to start is the trend towards more ride-sharing in the future.  This will result in a lower number of cars on the road, meaning less of the products (i.e. motor oil, brake fluid, anti-freeze, etc.) the company specializes in being sold.
  
Valvoline was the #1 name on the “S3 Top 10 Weekly Changes in Days to Cover” piece posted on our website yesterday.  Looking at the average traded volume of 1.2million shares over the past 2 weeks of trading, the number of days to cover (days required to close out all short positions) is nearing 11, hitting double digits in just over its first month of trading.

With the share price already down 18% since its IPO last month, short sellers have been enjoying the ride. 

To see the full list of securities that had the largest weekly change in days to cover, please visit:
http://www.s3partners.net/Research/WC_DTC_102616.php

For more information on the above analysis, please contact:
Matthew Unterman, Director, S3 Partners, LLC    
Matthew.Unterman@s3partners.net

The information herein (some of which has been obtained from third party sources without verification) is believed by S3 Partners, LLC ('S3 Partners') to be reliable and accurate. Neither S3 Partners nor any of its affiliates makes any representation as to the accuracy or completeness of the information herein or accepts liability arising from its use. Prior to making any decisions based on the information herein, you should determine, without reliance upon S3 Partners, the economic risks and merits, as well as the legal, tax, accounting and investment consequences, of such decision.


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