When attempting to short additional shares of E-House China (EJ) I received this message:

Shares for this order are not immediately available for short sale.
The order will be held while we attempt to locate the shares.

It’s a bit frustrating as the order was placed at $16.00 and would have been filled – the stock is now at $15.35 just a few minutes later.

So what does this mean for EJ?  Published short interest is 9% but that data may be stale.  I’m not sure exactly how often short interest is reported.  It could be that with the decline below the 50 day last month short interest has grown to where there are fewer shares available.

OR it could be that a large player (or several holders banding together) have pulled their shares off the market meaning they are not available to borrow – this is a typical “short-squeeze” trick and can cause bears to have to cover immediately resulting in a sharp rally.  I don’t think we will get this kind of movement in EJ anytime soon – especially with the market so weak – but it’s worth keeping in mind.