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Non-Tech : Auric Goldfinger's Short List -- Ignore unavailable to you. Want to Upgrade?

To: Sir Auric Goldfinger who wrote (2630)	7/13/1999 3:44:00 PM
From: Gerald Walls	Read Replies (3) \| Respond to of 19428

CLCX is todays' gift. I'm just telling you this FYI, not as an argument. It really makes for a good and funny read. You may find it interesting that CLCX was the Taipan Newsletter pick this month. The title on the article is "Stick it to the short sellers with this battered-down education stock!" James Passin (Taipan editor) rates it as a "strong buy" with a three-month target of $12 and a three-year target of $30. He also says: "Short sellers began attacking CLCX in early 1998 when it traded in the $20's and $30s. The shorts were right: CLCX is down almost 90% from its 1998 peak. However, the stock is radically undervalued by any metric at current depressed levels -- and there's still a massive open short position..." "Ripe for a short squeeze" yada yada "According to the latest short interest figures from HSADAQ, CLCX has a 2.57 million share short position. Compared to the 5.9 million share float, this short position is huge -- representing 43% of freely available stock!" yada yada And get this: "Web of Evil "From the IPO in 1996 to the peak in 1998, CLCX was awarded growth stock status. CLCX came through with quarter after quarter of enrollment, sales, and earnings growth. Wall Street analysts heaped "Strong Buy" ratings on the stock. CLCX rose over 1000% in just two years. "In early 1998, CLCX fell under attack. The reported short position ballooned to over 8,000,000 shares, representing 135% of the public float and 47% of total shares outstanding. Given the high valuation of the stock at that time (CLCX traded around $40 and enjoyed premium multiples to the education sector), the short seller attack may have been warranted. Anyone who shrted CLCX in early 1998 made out big during the subsequent 90% decline. "But the shorts weren't satisfied with establishing a short position in a modestly overvalued growth stock. In my view, an organized short seller conspiracy was formed. These predators initiated a ruthless and systematic campaign to drive CLCX out of business. According to my sources, the short seller conspiracy corralled some disgruntled students into class action lawsuits, infiltrated admissions offices all across the country, contacted every relevant state and federal regulatory agency with trumpted-up allegations of regulatory violations, instigated nasty articles in the mass media... "The brilliance of the shorts became clear when problems surfaced in four campuses. Management became so distracted with regulatory issues that enrollment growth softened and eventually turned negative. The stock collapsed, providing grounds for shareholder lawsuits. Class action shareholder lawsuits in themselves created negative sentiment towrds the stock, feeding back into the downward spiral of the stock. "The shorts won the war. CLCX collapsed in price. However, at current levels, all the bad news has been factored into the price. CLCX has resolved all major regulatory issues (only three minor regulatory issues remain). The shareholder lawsuits have been settled. "Short interest has plummeted in 2.59 million shares. This indicates that the major short sellers are covering their positions on weakness. My guess is that the shorts have moved on to other stocks. Since CLCX is radically undervalued by any metric, it doesn't make sense for anyone to remain short. This suggests that the remaining short position is held by weak hands." yada yada This would imply an immediate fair value target of $11.50 per share. yada yada As a long-term play on demand for IT training, I recommend Computer Leaning Centers (CLCX-NASDAQ) as a Strong Buy up to $6 with a three-month target of $12 and a three-year target of $30. To prevent short sellers from borrowing your stock and selling it into the market, I recommend taking physical delivery of your stock certificates.