IQE, still rising ahead of results

IQE report eagerly awaited results tomorrow that will have both bulls and bears of the stock on the edge of their seats. As reported here, IQE had been until recently under a constant short attack, the share price having fallen from a high of over 37p back in February to a low of around 18p in early July on the back of competition fears from US giant Qualcomm. According to shorttracker.co.uk, BlackRock still holds a 2.7% short position. That's fairly hefty considering the recent pre-result bounce in the share price to 27p today.

A good result tomorrow could easily send the shares higher, but I was slightly mystified by the BlackRock short position given the recent rise unless they are just trading this as a hedge? A check of the major IQE shareholders shows the following.

Blackrock Investment Management 37,076,124 5.74%.

http://www.iqep.com/investors-shareholderdata/

So, BlackRock have over 5% of the shares and are both long and short the stock. BlackRock Investment Management are down as holding 0.90% of that 2.70% short, the rest being held by other parts of the BlackRock empire. Perhaps it is just a hedge on Qualcomm fears?

Truth is no one knows what the company will announce tomorrow as so little has been said in the run up. Expectations are high that results will be in line or exceed expectations, so there is a risk after the recent bounce that there could be a sell off on the news if they disappoint. The results could still be fairly good and yet fall if there is profit taking on the news (trade the rumour, sell the news). Alternatively, it could break out further tomorrow, especially if expectations are exceeded. The IQE daily and weekly charts are looking more positive though, so, everything to play for.

Many brokers are still rating this as a 40-50p plus share, but it won't necessarily get there straight away, and we are still waiting for further details of what Qualcomm intends to do that started off the recent fall in IQE's share price. There could be further volatility ahead once Qualcomm makes up its mind.

http://www.guardian.co.uk/business/marketforceslive/2013/feb/22/iqe-semiconductors-competition-qualcomm