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Technology Stocks : TAVA Technologies (TAVA-NASDAQ)
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To: JDN who wrote (6565)11/26/1997 11:07:00 AM
From: Rob L.  Read Replies (1) of 31646
 
JDN, I think the short interest has a lot to do with the warrants and the PP. Although not publicly announced, the PP was known by many people (including those involved). The issuance of new shares tends to always be anegative for a company in the short run because most people assume it will be dilutive. As a result the stock generally tends to fall. Hence, to make money on a falling stock you short the stock.

Keep in mind that a large short position can be extremely bullish and can create a very rapid upward movement in the stock price. Good news comes out and people realize that the downward move is over or that they bet the wrong way and they all rush to buy the shares back, albeit at greatly inflated prices. This is known as a short squeeze.
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