Trading Diary: Little to report as Memorial Day approaches

Oil takes a hit Thursday, but stocks only modestly up to flat. Trading action begins to trail off prior to the annual launch of Beach Season U.S.A.

The Grand Strand, Myrtle Beach, South Carolina. (Image via Wikipedia entry on Myrtle Beach, CC 2.0 license)

WASHINGTON, May 25, 2017 – Candidly, we have precious little to report to you today, given the approach of the semi-official launch to America’s Summer Vacation, aka, Memorial Day Weekend.

Fun in the sun is on the minds of many traders and investors, particularly those within range of the beaches on America’s Left and Right Banks. (Great Lakes beaches are still too cold.)

For this reason, once they’ve snugged up their trading positions and hedges, active traders, investors and even some funds will likely endeavor to split from work early to begin their long weekend of fun, sun, and maybe even hot babes, just as long as those babes are not gender feminists who will whisk them off to court.

Read also: OPEC keeps production cuts, crude oil tanks anyway

All politically incorrect levity aside, some pros will hang out Friday in Wall Street’s hallowed precincts to accomplish some end-of-month window dressing in their portfolios.

But unless some really hot headlines splash across the net between today and COB tomorrow, there won’t be much to report on until next Tuesday when business returns back to whatever normal is these days.

Trading Diary

We’d mentioned in a previous column that we might try to obtain some shares of the Appian (symbol: APPN) IPO. Appian is one of those “unicorn” tech stocks (i.e., tech stocks that makes zero profits) that lives just down the road from us in Reston, Virginia. This “new town” D.C.-area tech-oriented suburb houses a major tech presence, including a major Oracle facility and numerous regional corporate offices in the tech and defense industries.

Read also: Trading Diary: Reston, Va.-based Appian Corp. to launch IPO

APPN priced at $12, the midpoint of its suggested IPO range, so we decided to take a chance and put in for 200 shares and see what happened.

Nothing happened.

The issue, to our surprise, appears to have been “oversubscribed.” Meaning that there were more people wanting to buy these new shares than there were shares available. That was perhaps unsurprising, given the small size of this issue.

At any rate, when this situation occurs, little guys like yours truly get zero shares as the bulk of them go to institutions and rich dudes, both of whom are far more important to brokerage houses than the likes of me and you. As we’ve written here before, this is beyond irritating. But this writer has dealt with it for nearly 40 years now, dating from the days of the Carter-Reagan presidential transition when he worked as a stockbroker himself. It’s the way of the world, alas, and yet another way that the rich get richer.

APPN shares opened, predictably, above the $12 offering price, and have been trading in a range of $14.60-$16.59 per share since they opened for public trading late Thursday morning.

We actually don’t like this company a lot for reasons we mentioned in an earlier article, viz., while the publicly traded “A” shares provide one investor vote per share, they’re hopelessly outclassed by the insiders and bigwigs who hold a vast amount of controlling “B” shares, which carry 10 votes per share. Sure, this is better than Snap, Inc.’s (SNAP, the parent company of Snapchat) zero votes per share. But we still don’t like it, since it’s clear that such companies want our money, but otherwise want us to shut up.

APPN joins the many other companies that also boast a two-tier investment structure, so the company is hardly unique. But these arrangements strike us as being profoundly un-democratic. On the other hand, as we see daily here in Washington, D.C., the U.S. itself is becoming less and less democratic, so perhaps we shouldn’t be surprised that corporate America is increasingly taking that direction as well.

No point in extending this rant, however, as we’re already on record as holding to this point of view. We actually wish our neighbors down the street well, as they do actually employ a modest batch of tech workers in our part of the world. But with direct competitors like the behemoth known as Salesforce (CRM), APPN will have to hustle if they’re going to survive beyond Trump 1.

On other fronts, our big position in Cliffs Natural Resources (CLF) got a big boost earlier this week when some major buyers appeared to step in, taking advantage of this stock’s deep spring swoon to scoop up grossly oversold shares. However, the sellers and (perhaps) some of the legion of short sellers in this issue are back at it again today, hitting the stock for a nearly 2 percent loss in below-average trading action.

Short interest in CLF shares is, by the latest estimate, sitting at around 15.5 percent, down slightly from the previous 16.2 percent mark. If buyers could sustain the kind of rally they mounted earlier this week, we could finally achieve the kind of breathtaking short-squeeze we’ve been hoping for since we started accumulating a significant position in these shares. Fingers crossed.

Otherwise, stasis all around. It’s boring, but that’s what you usually get before a holiday, particularly when it comes at the end of a month.

We may or may not write a column tomorrow, depending on whether anything significant transpires. If we don’t, we’ll be back again Monday or Tuesday of next week.

In the meantime, have a happy and safe Memorial Day Weekend.

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