Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: It was just another humdrum market day for Ebix
So what: There's not a lick of news on Ebix today, nor defamatory blog posts or shareholder lawsuits. In short (pun very much intended -- read on!), I think we're looking at big-ticket traders having a go at large-scale market manipulation today.
Now what: The maker of e-commerce software for the insurance industry and longtime Rule Breakers recommendation has been under a lot of fire recently, and 24% of its float was sold short as of the latest reckoning. That rickety market position lends itself to manipulation of share prices, with or without substantial news on which to hang these sudden moves.
Ebix shares have fallen more than 40% from 52-week highs set in March, possibly encouraging most of the shorts to take their profits and move on. We'll know for sure in a couple of weeks, when the shorting stats are updated and published once again. Mind you, the shares are still expensive at over five times trailing sales -- but then you often pay a premium for the kind of fat margins and relentless growth you see in Ebix and other ultra-growth stocks.
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