Katie, You may recall I had tried looking into this imbalance and was told (after consulting with four different brokers) that they didn't know and PPHM would be the best party to answer to the questions.
Bunny's review is interesting in that they correlate that other stocks making their way onto the Russell index also showed a large and lingering short increase. I had asked the question if a fund that needed to pick up shares for the Russell could short the shares and end up not reporting the shares in the institutional holdings for the company. Part of the puzzle for me is that there is no increase in institutional ownership that would balance the increased short interest. Russell demand should have about balanced the UU placement and exercise of warrants, so the short interest remains as an unanswered development.
I don't see this as a negative, since I do expect that the large short, if covered, would likely move pps back up near $2 again even without news. The theories about how someone wants to accumulate more shares cheap by using shorting to suppress pps makes sense if there is enough volume at lower pps to allow for both the accumulation and short coverage. I have not observed that sort of volume yet, although the shakeout from weak hands yesterday may have helped out the shorts a bit. Hard to say if the negative hype will help move ten million shares of short coverage plus maybe another 5 million shares to institutions without pps surging back up. If PPHM was trading at a buck twenty and the short balance were near zero, I would be more concerned than trading at this pps while PPHM carries ten million shares in short interest. It might be a simple matter that someone wants or needs more PPHM shares and is using the high level of shorting to wait out PPHM long enough to see if they stumble, enabling share price to drop and cheaper accumulation. I certainly don't consider what was communicated at yesterday's conference call a stumble, although the RB bashers were leading in as if that were the case. How could confirmation that Gates Foundation funds are moving research of PPHM technology at Duke and other universities or that PPHM is launching Bavi cancer combo trials in India be construed as a stumble? The only negative of note is that the timeline has slipped.....again LOL.
Reinforcement of strong Bavi performance in the single dose trial at the October conference keeps PPHM in contention for greatness. Reporting of 2 log reduction or better repeat dose trial results in the first half of 2007, should shift PPHM to the gate of phase 2 Bavi trials and give pps a lot of upward pressure. PPHM follow up with successful results from the India Bavi combination trials in mid to 3rd quarter 2007 should create enough fervor for PPHM shares to pressure the short to cover and draw in financial support for Phase 2 trials in the US.
A fun speculation is that a buyout offer is in hand with a hefty pps price premium to current pps, contingent on PPHM achieving certain milestones. Such an arrangement would be enough to make PPHM management chuckle when asked if they knew who was responsible for the short and how it is affecting pps. Of course, the flippant attitude about the short shares could have been the result of many other explanations, but I do find it interesting that the stock balance question was among the first raised during the conference call Q & A portion. King and Lyttle seemed prepared to give a rehearsed answer that didn't tell investors much.
With PPHM set up to have a news reporting opportunity about every ten days through mid December, I wonder what PPHM will be reporting? I hope they can do better than recycled news.
Best wishes and IMO.
KT
