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Biotech / Medical : Vivus, Why the Slide?

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To: Tunica Albuginea who wrote (1853)6/6/1997 10:10:00 AM
From: Stephen D. French   of 3991
 
Tunica - Vivus is very volatile for a variety of reasons.

Consider these facts: The great attention the company has received has made it one of the countries biggest short percentage stocks. It has received a number of negative articles regarding the valuation (too high) when the stock was over apx. $50/share.

The company has made good profits with an excellent profit margin but these profits will eventually be squeezed by competition. This leads to uncertainty in the market.

The big money players understand the reasoning behind the stock,short squeeze etc, and have the resources to easily manipulate the shares up and down. The shorts and longs can play the stock two ways, short term or long. Short term they can swap their positions based on the support and resistance points which are near 38 for the low and 50 for the high. (These trading points were adjusted after the stock fell from its heights, before all the negitive press)

The shorts also have the option to leave it alone and eventually, they hope, the stock will come down below 30 into uncharted waters so to speak.

The longs are justified for some gains due to its present earnings but they are well aware of what the future holds.

This stock isn't really a long term investors play. It's a game stock where it'll continue to act like a roller coaster so that the insiders and players can maximize their profits.

stephen
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