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Author: mattallen100 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 240  
Subject: Godzilla vs. Mothra Date: 4/24/2008 3:00 PM
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Loop has taken another leg down with a Godzilla vs. Mothra battle going on around the $11 mark. I think Loopnet is Mothra. Here is why I think short interest in the stock is going up (already at 52 days to cover).
1) Commercial property prices and transaction volume are coming down due to financing issues and cap rate compression. People don't buy when prices are coming down; they wait. I realize that LOOP doesn't make money off transacions, but those who do have less money to spend and new customers put off signing up for premium memberships as prices are coming down.
2) Next earnings report is coming out soon. Although mgmt has given conservative guidance, any miss will be painful, and any beat will be chalked up to sandbagging. I am expecting them to meet and continue with cautious guidance.
3) Always a chance the home crisis impact on commercial could escalate, although the reits have rebounded of late which is good for Loop.
4)On its most recent run up to touch $14, volume was very light. This really empowered the shorts with earnings coming up. Do you really think Loop had a blow out qtr? No, its slow and steady for the long haul now.
5) Most importantly, shorting Loop has worked brilliantly up until now. The weak money rode this stock lower and finally just gave up never to return. I think this will be the shorts eventual downfall though as just as a stock can run up to irrational heights, it can be shorted to irrational lows. If institutions really now own 90% of this stock, the eventual short squeeze will be massive. The recent purchase by Loop shows me that mgmt is not panicking and they are working their plan. Meanwhile they are making 15% ROA, have no debt and $3 per share in cash (have you factored that into your fwd PE?). Short interest gets updated tonight, and I wouldn't be surprised if it has substantially increased. Hold on, listen to the earnings call next week, add to the position if mgmt continues to perform, and watch the volume instead of the price. When volume spikes, don't sell and let the shorts out of the dilemma they have created for themselves.
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