Yesterday John Hempton at Bronte Capital released a rather in-depth argument for why the firm believed that Chinese travel company Universal Travel Group (UTA) was a potential fraud on the New York Stock Exchange. Their blog post tanked the stock by 20% and as Felix Salmon notes, likely made the firm a substantial amount of money as a short trade.
This morning, we noted how UTA was falling in the pre-market, yet as of this afternoon the stock seems to have recovered as is actually up slightly (1%). Moreover, looking closer at the stocks action over the last 40 or so hours, we noticed a sharp jump in volume right near the close of trade yesterday. The stock spiked on this volume, as shown below. (The volume spike is in yellow, and shown in the lower chart)
It makes us wonder — Has Bronte already taken profits on this spectacular blog-driven short trade? Someone was buying a ton of UTA yesterday around the close, and it was either a UTA uber-bull or someone covering a big short.
(If you cannot see the above graphic, click here.)
Disclaimer: This is not an investment recommendation, and everyone should do their own complete due diligence. The author or his associates could have exposure to any security mentioned at any time.