Price movement..., page-3

Gem has been suppressed by huge short selling activity over the past 18 months from a couple of major short addicts (a big 4 bank is apparently one of them), and might be evidence that they are getting fatigued. But might be short covering, given the breakout price and strong volume.

Short sellers feed on corporate blemishes, of which gem has its share -- just read the many "not held" posts. 10 brokers estimate gem's target price at 50% above its current price. Just one positive announcement such as new acquisitions at reasonable ebitda might trigger an upward price re-rating.

The Anchorage takeover of affinity could be good news in a couple of ways. Gem will get some cap gains on the deal. But the bigger gain may be less over-priced childcare centre buying by affinity. Private equity firms conserve cash to make the balance sheet look good, so more focus on reducing vacancies and costs in the short run. They might buy some centres only just before selling affinity shares, to give a sense of momentum. Incidentally, a good write up recently by an insto about anchorage's tactics in the dick smith deal. Rinse and repeat with affinity?