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Biotech / Medical : Chromatics Color Sciences International. Inc; CCSI
CCSI 24.53-1.9%3:59 PM EST
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To: GemSeeker who wrote (1814)4/24/1998 8:16:00 PM
From: Ron Harvey  Read Replies (2) of 5736
 
<<The short interest is so astronomical that it makes me wonder if they know something I don't.>>

I understand your concern, but these shorts are unlikely to have any inside information beyond a disbelief in the long-term earnings prospects of the bilirubin testing device. It's the shorter-term implications that really confuse me. If the distribution deal is an especially good one for Chromatics and is publicized to a far wider audience than the stock now commands, then what's the shorts' strategy? They must have some more selling ammunition left for a price rise, but considering how much has already been expended, they seem to have placed themselves in an extremely vulnerable position. The only thing that makes sense to me is that they're counting on a deal that gives CCSI only a small royalty percentage, so small that CCSI longs would be disappointed and potential new buyers would be uninterested. But after putting so many years into developing a product then taking so damned long working on a distribution arrangement, it wouldn't make any sense for Chromatics to come up with something ordinary. Still (and I'm continuing to try to grasp the shorts' outlook), there could be a deal that's better than usual but not extraordinary. Yet publicity could still send the stock price nudging against short-squeeze territory. Maybe the shorts think they'll withstand it and hang in there for what they believe to be longer-term negatives, but weaker hands among the shorts will cave if this thing moves to 19 or 20. Cross your toes; cross your fingers.
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