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    The Biotech Short Squeeze

    By Stock Charts | April 27, 2007




    I came across a great article over at Biotech Health Investor about the biotech short squeeze. A short squeeze is when a rapidly rising stock price escalates because short sellers need to buy stock back to cover their shorts. This causes the stock price to rise even higher.

    This happened very recently with Dendreon’s short squeeze following the good news about one of their primary drugs, Provenge. Prior to the approval, 30% of outstanding shares were shorted. After the initial good news, the stock gapped up from $5.22 to $12.93, and over the course of the next week reached a high of $25.25 from the resulting short squeeze. The article over at Biotech Health Investor looks at a few other biotech companies with upcoming decisions and a heavy short interest. Could be a good opportunity to cash in on a few short squeezes, if the news is good.

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    Topics: Commentary | 2 Comments »

    2 Responses to “The Biotech Short Squeeze”

    1. Sam Lustgarten Says:
      April 27th, 2007 at 5:26 am

      Thanks for leading me to this! Had no idea how much short interest was in some of these biotechs!

      -Sam from MarketMatador.com

    2. H.S. Ayoub Says:
      April 27th, 2007 at 5:35 am

      Matador,

      thanks for the mention. Great blog.

    Comments