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Sunrise Senior Living Inc. Message Board

  • rgillscap rgillscap Jul 14, 2001 5:14 PM Flag

    New to board..Question?

    Everything about SRZ looks great except for the huge short interest.Can anyone reasonably explain this situation.I want to jump into this
    arena but the short interest is strange if true.Good fortune to all and any help would be appreciated.

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    • SRZ hit a high of $29.15 on Friday...
      and closed at $28.81...

      just $2.19 away from $31.00 the highest high since Jul/Aug 1999...

      Any short who has gotten into this stock, in the last two years has shorted at $31 or lesss...

      How many shorts have held a short position in this stock since before Aug 1999... I'd bet (and I am betting serious money) NOT A SINGLE ONE

      This leads us to one simple conclusion...

      When this stock rises $2.20 to $31.01, every single stinkin' short is under water and will have to do one of two things

      1) deliver stock to cover their short position, or
      2) buy stock in the open market to cover their short position.

      The short position increased dramatically just last month...

      up by 911,787 shares from May to June
      the May to June increase in the short interest is a whopper at 8.9% of the float...

      The highest price during that period was $25.85, so...

      almost 1 million shares have been shorted in the May 15 - Jun 15 period at a price of $25.85 or less...

      Let's be kind and assume that all the shares were shorted at the best possible price...

      then as of Friday's close these shorts have an 11.5% loss...

      when SRZ hits $31.01 on monday or tuesday, they'll have a 20% loss on their hands...

      Now SRZ consolidated between $24 and $20 for over 4 months... those who shorted the stock at $20 will have a 55% loss on their hands, a 41% loss if shorted at $22,
      and those at $24 a 29% loss.

      The rumor is that the large size of the short interest are those holding convertible bonds... but with 62.8% of the float being shorted leaves only about 3,243,600 tradable shares laying around before the shorts have their shares taken out from under them by the brokers...

      This will be the most interesting move since RMBS went from from $20 to $117 (split adjusted) in 23 trading days last year...

      Now if SRZ does the same, 4x to 115.24, its PE will be sitting at about 74.52... where Cisco sat for the most of 1998 thru 2000... and guess what SRZ is in a bigger growth industry than Cisco is now... all us baby boomers have to find a place to put ma and pa, because we're too busy to do the job right ourselves...!!!

      and at next year's consensus of $2.24, $115.24 gives a PE of 51... not too crazy for a Gorilla in the soon to be exploding demand of Retirement Healthcare...

      ATTENTION ALL SHORT SELLERS: Please ignore the above obviously ignorant rantings. We need some of you to hold on until your broker closes your position at $48!