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Biotech / Medical : VVUS: VIVUS INC. (NASDAQ) -- Ignore unavailable to you. Want to Upgrade?

To: VLAD who wrote (19122)	2/26/1999 1:31:00 PM
From: VLAD	Respond to of 23519

Interesting thing regarding short interest: Thought I would look at a history of short interest as it relates to stock price: On 8-15-98 the short interest was 11,027,118 shares. The stock price at the time was 5 1/16. We then dropped below 5 on 8-21-98 and in 8 trading days we broke 3 on September 1, 1998. Over the past 6 months since the August short interest report we have had significant consecutive decreases of short interest yet no change in share price. In fact beginning September 15 and on the 15th of every month since that time the stock price has closed below 3. On September 15, 1998 the short interest was 9,632,150 and the stock price was 2 7/16. On February 15, 1998 the short interest was 5,851,189 and the stock price was 2 7/16. In essence the shorts were able to cover almost 4 million shares over those 5 months without increasing the stock's price one tick? So how they do that? Only 2 possibilities: 1)Some of it was the unwinding of hedged positions which would decrease the short interest and have no net effect on the stock price. 2)Some of it was from weak holders selling their shares at a loss into the open market allowing naked shorts to cover. That being said, I believe that during our last drop to 2 we shook out the last of the weak share holders. Those who didn't sell last summer and are still holding obviously have no intention of selling now or any time in the near future so long as Vivus trades this low. If the remaining shares held short are hedged as I believe the majority are, then 2 things can happen: 1)Those hedged can unwind their positions and get out completely which would have no net effect on the stock price. 2)Those hedged may decide to cover their short positions in the open market cashing in profits on their short position and believing that their long position will recover allowing realized profits after they hopefully sell their long positions at a price that is at or above their initial cost basis on the long side.