Copperfield Research Magically Releases Bearish OCZ Report the Day after Large Put Option Volume
As many of you know, Copperfield Research released a bearish report on OCZ today that had a detrimental impact on the stock price. I’m not going to do a point-by-point analysis of the ridiculous innuendo and claims in their report. The sell-side actually did a good job today refuting it (call your Stifel or Needham broker to get the defenses).
Copperfield Research has a history of putting in sensationalist key-words (“House of Cards” “Chinese reverse merger” “Not a Chinese Fraud”) in their reports and head-lines to get attention that have nothing to do with the companies they are covering. Shameful in my opinion, but it shows you the kind of character they have.
I bought shares in OCZ today as I believe the company makes the best performing SSD drives in the world today (read the customer reviews on Newegg, reviews by leading tech enthusiast sites like Storage Review), has tons of cash (they just raised $94 million last week), and many quarters of amazing growth ahead in what I believe is the best secular growth product cycle in technology today (SSD drives). There is no way this company is a fraud as Copperfield implies; I would bet my left arm on that, but that is neither here nor there as the fundamentals will come out and the stock price will reflect this in time.
I just want to point out this below.
On Copperfield Research’s Seeking Alpha profile page they explicitly say they do not use options to establish positions prior to a report’s publication. Moreover they do not discuss unpublished reports, or provide advanced warning of future reports to others.
Yet on 4/19/11, the day before the release of Copperfield Research’s bearish OCZ report, Minyanville’s Steve Smith noticed large put option activity on May $7.50 strikes, when OCZ stock was trading in the mid $9 range. Since Copperfield Research doesn’t let anyone know about their reports ahead of time, that put option volume must have happened by magic right? Pure coincidence I’m sure.
Disclosure: At time of writing, the author is long OCZ stock.