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Biotech / Medical : Vivus, Why the Slide?
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To: DDS-OMS who wrote (3711)9/22/1997 1:55:00 AM
From: Rubble   of 3991
 
Speaking of squeezes...a VVUS squeeze would probably be MUCH uglier than the ZITL squeeze. The ZITL squeeze started on rumors that Soros was looking to buy the company. As the rumor spread people started buying, shorts were forced to cover, and the stock jumped from about 25 to 70 in a week. If the rumor hadn't been exploded by a Soros insider on that cold December morning, ZITL would have handily broken the 100-mark. I think a VVUS squeeze will not be started by rumors, but by an increase in price based on fundamentals (like a $.45 EPS blowout quarter). Since there wouldn't then be any panic selling that keeps the price in check as there would be no rumor to expose, the VVUS squeeze would probably continue until most of the short shares are bought back. I consider the 40-mark the critical point at which time the shorts will hit the exit doors en masse. BTW...VVUS has not yet experienced a short squeeze of any significance...all the buying in February that took VVUS over 40 was just people buying VVUS based on fundamentals/momentum.
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