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Biotech / Medical : VVUS: VIVUS INC. (NASDAQ)
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To: VLAD who wrote (12138)7/26/1998 10:00:00 AM
From: betty moyers  Read Replies (1) of 23519
 
VLAD, I found your analysis of the market value including short interest in fact interesting. I wonder though if one should not calculate the value with the same share price for both the short shares covered and outstanding stock.

This would make the analysis based on the current 11.9 MM shares and an average short covering price of 12 look as follows :

(11.9 * 12 + 31.5 * 12) / 31.5 = $16.5 per share market value

Now if we ask the question in reverse, i.e. what average price of short covering would give a market value of $ 20 per share we get $14.5. NOT NOT NOT unrealistic at all

(11.9 * X + 31.5 * X) / 31.5 = $ 20 solve for X = 14.5

Just for the hell of it compute for $ 25 per share buyout market value gives average short price covering expectation of $ 18

(11.9 * X + 31.5 * X) / 31.5 = $ 25 solve for X = 18

Anyone who has watched a stock short covering like KTEL and dozens of others knows what can happen in these cases VERY VERY QUICKLY
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