CNSI Cambridge Neuroscience Message Board

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Biotech / Medical : CNSI Cambridge Neuroscience

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To: swoboda4 who wrote (371)	3/23/1998 8:51:00 AM
From: Dr. John M. de Castro	Read Replies (3) of 675

Everyone is neglecting short sales in this discussion. If you sell CNSI short at $2 and the stock goes to $1 after the dividend, then you can cover your position at $1, making a $1 profit. Of course you have to pay taxes on the gain, but your asset hasn't lost half its value. I suspect that there is a considerable short position in CNSI at the moment. This is probably the reason that the stock has not gone up on the news of the dividend. The other side of the coin for those of you who, like me, dislike the exposure of a short sale to positive news, these shorts will have to cover after the dividend. This could support the stock price, keeping it from falling the $1. John de C

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