Re short positions in LGIH

As I continue to research LGIH for myself, I note that it recently sold convertible bonds to raise capital. Nothing wrong with that. But big purchasers of convertibles sometimes hedge their position by simultaneously shorting the equity:…

I’m thinking that this may explain the ~25% of LGIH float that currently is short. (If someone speaks with LGIH investor relations sometime, this might be something to ask them about.)

The implication is that the large short position may not necessarily imply that investors are betting against LGIH but rather that it’s simply a hedging strategy.

Anyhow, FWIW.


Thanks for that posting MisterFungi. It’s good to hear that a high short interest isn’t always investors thinking the stock will be going down. I hope that is the case here.