(Updates with closing share price in second paragraph.)
Jan. 20 (Bloomberg) -- American Superconductor Corp., the maker of wind-turbine parts suing its former largest customer, surged for the third time in four days as investors covered short positions amid speculation that the case may be resolved.
AMSC rose 7.4 percent to $5.64 at the close in New York. The shares jumped 28 percent Jan. 18 and have increased 53 percent since the beginning of the month.
“A lot of rumors are swirling about the arbitration case,” said Carter Driscoll, a Capstone Investments analyst in Miami who rates AMSC shares a “hold.” “I’m sure there was some massive short covering the other day in anticipation of that.”
AMSC says Beijing-based Sinovel Wind Group Co. broke contracts and stole its intellectual property. Sinovel denies the charges and maintains AMSC’s parts weren’t meeting its standards.
The case is due to be heard in China “early this year,” said Jason Fredette, a spokesman for Devens, Massachusetts-based AMSC. He declined to comment on the reason for the share move.
Short sellers borrow stock hoping to profit once the shares decline and usually have to pay interest while their positions are open. They eventually have to buy shares to cover their positions. Most Chinese offices will be closed the week of Jan. 23 for the Lunar New Year holiday.
“When you get those big, 20-plus-percent moves without any fundamental moves, it generally is short covering,” Driscoll said.
The Beijing Arbitration Commission called off a hearing about the matter earlier this month, according to a report in the China Securities Journal on Jan. 10 that cited people from the commission and Sinovel it didn’t identify.
A former AMSC employee in Austria pleaded guilty there in September to charges including economic espionage after being accused of passing software and source code to Sinovel, which is China’s second-biggest wind turbine maker.
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