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To: 45bday who wrote (4259)	2/2/1998 6:12:00 AM
From: tech	Read Replies (2) \| Respond to of 10786

solution, RE: short interest The general theory is that large short positions are not good because people who short stocks face a greater risk, therefore they have done more due diligence on the particular company and a large short position would be looked upon as negative. (I personally don't think this applies to every situation, but large short positions are very hard to overcome) For instance, companies sometimes do offshore deals to raise capital at 30% of the current market value of the stock. these investors, most often, take short positions against the shares they will be receiving and lock in their profits. Now they don't necessarily care about the company, the stock, or have any positive or negative feelings one way or the other. They are just taking a short position to lock in their profits. (this kind of short position doesn't fit into the general theory) The other question is what is considered to be a "large" short position. Generally once a short positions start to go over 5% of the float it becomes noticed. However I personally don't think you can set a set percentage on every stock and every situation. You also have to take into account trading activity, volatility, etc. However, short positions that start to go over 10% of the float become very hard to "shake out". ALYD's short position has increased about 120,000 shares from Dec. 97 to Jan. 98. viwes.com I don't have the current total float, but I don't think it is that big of a deal. There are other things that may be influencing this increase other than people thinking the stock will go lower. In any case, I don't think it is that big of a deal yet. If the short interest continues to increase and the put option activity picks up, then it may be something to consider. I personally wouldn't short any of the viable y2k companies after Q1 of 1998. It would be much safer to trade the puts. I think there is so much business out there that at any moment a company could be awarded a multi-million dollar contract. I would also start to look at some of the y2k companies who do have excessive short positions. (as long as they have a viable solution) they could provide some good $xxxx.xx if they get contracts. Yes, even ZITL may offer a good trade if they can ever get their ship in order and start wining projects. ( I think ZITL's short position is approaching 38% of the float) regards,

To: 45bday who wrote (4259)	2/2/1998 8:30:00 AM
From: Jeffrey S. Mitchell	Read Replies (2) \| Respond to of 10786

Re: ALYD Short Interest ViWes InvestInfo: Short Interest on NASDAQ Stocks Shares Avg Daily Month Short Volume S/A* 01/98 289,503 50,656 5.72 12/97 171,666 143,086 1.20 ÿ * S/A = Shares Short / Avg Daily Volume; it may be used as a rough measure of days to cover. Source: viwes.com What catches my attention is that ViWes says it would take shorts 5.72 days for shorts to cover. That means if ALYD announces positive news like another big-name contract or decent earnings, then the stock should pop bigtime as shorts would be competing with many of us to buy shares. Should be interesting. As a matter of fact, I would think many would be slowly covering between now and earnings. - Jeff