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Technology Stocks : Global Crossing - GX (formerly GBLX) -- Ignore unavailable to you. Want to Upgrade?

To: brk who wrote (813)	5/11/1999 1:08:00 PM
From: GrokSoup	Read Replies (1) \| Respond to of 15615

> I am really naive on how short interest effects stock movement. Is > it good to have a excessive short interest in a stock? Does this > lead to a short squeeze and drive price up or does it mean that a > sell off is near? Any explanation would be greatly appreciated. Sorry for the long delay, but the answer is that "it depends." A large short position is usually a bearish signal. It means people think there is a good chance of a price decline. But there are exceptions. As someone else has said, it could also mean that some sort of arbitrage is taking place. A large short position in an illiquid stock usually a recipe for a short squeeze -- unless the shorts genuinely know something. In this case it appears the short position is a long-short artbitrage, so it may be less material. In general, when looking at short positions you want to look at the following things: DTC: the number of days it would take to cover the current short position at current trading volumes. % change: How much the short position has changed since the last reporting period. Big changes up or down can be bearish, or bullish, respectively % float: A measure, again, of the likelihood a short squeeze. If a significant percentage of the float is sold short then that says shorts are taking a big bet against the company. Why? Because it will be hard for them to obtain shares to cover their positions without driving the stock higher. Hope this helps. P. groksoup.com