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Biotech / Medical : Vivus, Why the Slide?
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To: DDS-OMS who wrote (3700)9/22/1997 12:44:00 AM
From: SteveG   of 3991
 
Hi Gary,

I'm addressing this to you, but am intending this primarily to RT.

<They are owned by insiders who have to file an intention with the SEC before they can sell;>

This insider filing is on an SEC form 144, and indicates insider's intention to sell the shares they file and register into the public market. The actual sale of shares is reported on a form 4. These filings can be seen on the SEC Edgar website (actually form 4s are not filed electronically, so often are not found at edgar):

edgar-online.com

type in VVUS and it can be seen that there was an insider filing recently on Sept 4th.

Additionally, if a company feels there is a need for working capital, or the intention to retire debt (VVUS has very little), the company can file to offer additional shares to the public in a secondary offering. These shares would be dilutive, as well as increasing the public float.

<So add the # of shares short to the float and then divide that by the short position to get a more accurate %. VVUS's percent short is more like 30% than 50%>

True. Good point.

As you point out, in the case of a squeeze, there is actually a (temporary) pool of 30MM public shares from which the short sellers can make their purchases. And each short share covered then reduces the temporary float by that share.

Regards-

Steve
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