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Gold/Mining/Energy : Strictly: Drilling and oil-field services
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To: SliderOnTheBlack who wrote (22679)5/22/1998 7:43:00 AM
From: marc chatman  Read Replies (1) of 95453
 
I would guess the increase in short interest in EVI is due to arbitrage opportunities which arise from time to time due to the disparity in prices between EVI and the companies which it is acquiring. I think it may have been Doug who has been pointing out some opportunity to acquire EVI at a discount by buying into one of its acquisitions. When the arbs see the price disparity, they will short the overpriced stock and go long the underpriced stock.

Perhaps there is some substantial short interest which could fuel a move in EVI, but expect much of it to have no effect as the arbs eventually receive EVI shares in exchange for their shares in the acquired companies and use those shares to cover short positions in EVI.

Actually, I would like to have seen a higher short interest in RIG and VRC for exactly the reason you mention with respect to EVI.
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