According to Nasdaq data, as of 6/29/2012 it looks like AH has over 26% short interest, or 11,023,146 shares, with days to cover well over 9. If this weren't such a thinly-traded stock that would amaze me given the recent drop from $25 to $11.
Shorts must be pricing in some really bad scenarios for this company. I know there was bad publicity over their dealings in MN along with a pending court case and loss of a major contract there. That said, the need for the service Accretive provides has not diminished. In fact, the Supreme Court ruling on healthcare laws may even give them new ways to market services.
So far, all the short selling brought the stock from $25 to $11, for a loss of 56%. After such a dramatic drop, has the future prospects for this company changed so drastically that shorts expect to make even more money? Or, with such a low volume stock and high insider ownership, is it just hard to get a good opportunity to cover without moving the share price dramatically? I may be missing something, but I don't think the fundamentals that lead to the impressive growth have really changed. Although, I think Accretive will have to be a little more "by the book" going forward.
Watching the price movement over the past week or so, it seems like someone really wants to accumulate some shares and is willing to pay up for them – to a point. The scary thing is how volatile AH can be – it rises fast and then you see someone quickly tank the price several percent with 50K shares traded. Then, in the next breath it is raising right back to its recent high. I think the shorts should declare victory and move on to greener pastures.
With such a low volume stock, most of that 50% gain the shorts made so far could quickly be wiped out. All it takes is one or two sizable shorts to close their position ahead of what might be a good earnings call given past history (August 8th). Unless there is another shoe to drop, remaining short AH and being late to the pre-earnings covering party would not be pretty the way this thing moves on low volume.