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Strategies & Market Trends : Shorting stocks: High fliers

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To: drakes353 who wrote (526)8/31/1998 8:47:00 AM
From: Q.  Read Replies (1) of 709
 
Drakes, re. HEB, I think it's an interesting idea to identify small US stocks that have recently started trading in Germany. This seems to cause the share price to increase, at least in the two cases I've looked at (TRBD and HEB).

I was able to borrow HEB shares.

I should backtrack on one thing I suggested about HEB in my previous post. While it is true that the German firm 'Value Management & Research' did a report on HEB, and arranged for them to get listed in Germany, after talking to one of their analysts, I no longer think VMR is merely a 'tout' that is paid solely by the listed companies.

There are other reasons I think HEB is a good short, though, and these are:

* Most importantly, shares from the 1997 private placement go out of lockout very soon.

* The market cap is about 40 X the annual run rate for
R&D, which is way too high for a development-stage biotech.

* HEB was brought public in 1995 by Stratton Oakmont,
which doesn't have the best reputation, and
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