Linear Shorts Cover Due to Merger
More than half of Linear Technology Corporation (NASDAQ:LLTC)‘s slightly over 9.00 million shares on borrow were covered from July 29 to the middle of August after the tech company announced that it had agreed to merge with Analog Devices, Inc. (NASDAQ:ADI) on July 26. According to the terms of the agreement, Linear shareholders will receive $46 in cash per share and 0.2321 shares of Analog Devices for each share of Linear that they own. The transaction is expected to be immediately accretive to Analog’s EPS and free cash flow. Synergies from the deal are expected to near $150 million annually within 18 months of the deal closing. David Blood and Al Gore‘s Generation Investment Management raised its holding in Linear Technology by 1% to 12.3 million shares during the second quarter.
Hope Bears Losing Hope
Due to the lack of market panic after Britain’s decision to leave the EU on June 23, bears in Hope Bancorp Inc (NASDAQ:HOPE) covered their shorts to the tune of 53.9%, or 3.27 million shares during the July 29-to-August 15 period. Given the strong U.S. economy and Federal Reserve Chairwoman Janet Yellen’s statement that the case for rate hikes has “strengthened,” the bear case for Hope Bancorp Inc (NASDAQ:HOPE) looks less appealing. If interest rates rise, Hope Bancorp’s return on capital will rise too.
Oclaro Shorts Give Up
Oclaro, Inc. (NASDAQ:OCLR) was the most covered short stock from the end of July to the middle of August, as shorts pared their position by an astonishing 72.5%, or 20.2 million shares during that time. After all the covering, only 7.3% of the company’s float was on borrow on August 15. Shares of the micro-cap are up by an impressive 141% year-to-date due to increased investor confidence and a string of solid earnings reports. 29 funds in our system were long Oclaro, Inc. (NASDAQ:OCLR) as of the June 30 13F reporting period, down by four funds quarter-over-quarter.