There is very little left in what has become a very crowded trade for shorts.
Even if there was a collapse to 4... that's a whopping 1.79 left in the trade.
The upside here is measured in ten dollar bills, not a single and a few quarters.
The only upside is to competitors in Billion dollar markets that Arena will soon be taking over: they want to hold back Arena as long as possible. 2 weeks might mean 100 million dollar to their annual bottom line. Delay, delay, delay... Won't matter - Arena has the solutions, change is happening now, and it will cost the shorts their third homes in Colorado and their yachts...
Throwing out numbers or guestimates is not going to mean didly squat. The real significance is in the action that happens when a heavily shorted stock capitulates. One does not have to look far to see what the upside potential could be. The most recent example of that is TESLA(over 26% short interest before taking off) where shorts have been crucified and beyond all reason the stock is consistently busting the short position.
Sentiment: Strong Buy
In two years you will likely look back at 10.90 and see it is not much different than 5 bucks.
Shorts are getting greedy here. There are so many ways for them to get burnt on long list of potential developments.
Think about it. 60 million shares short, with the catalyst being things that turned out to be untrue (no FDA approval - no efficacy - will be worse than Qsymia). All that is needed is one or more of the following to happen:
1. Additional partners for China, EU, Australia.
2. Approvals pending in Canada, Mexico, S. Korea and Taiwan.
3. Results of Bel/Phen trials
4. Improved sales through DTC advertising campaign.
One or more of these positive developments could be all it would take to turn ARNA up and bury the shorts.
Honestly, what, at 5.80, are 60 million short shares waiting for?
Arena is not going away. Sales will continue to increase. Eisai will continue to ramp up DTC magazine ads and eventually start in on television ads.
Let me put it this way.
Would a sane person short ARNA today at 5.79? And, if the answer is yes, with what price in mind?
Worst case for longs is a move back to around 4 where gap support should be huge. I personally think that will not happen.
And, after that? In a few years we will be looking at another JAZZ only with blockbuster drugs.
Shorts will not get 50% from here. No way. No how. MAYBE 30% if the wheels just come off.
So, a short sells 100,000.00 worth of stock and covers for a 30,000.00 gain.
In a few years, the longs that DID buy around 11.00 and bought 100,000.00 worth will have doubled their money at the very least.
Like I said, the upside here absolutely dwarfs the downside and there are numerous catalysts that could hurt the shorts at any moment.