Fred W. Frailey, editor of Kiplinger's personal finance magazine, has extended a challenge put forth by Bill Miller - Legg Mason fund manager.
Miller has invested in a company (through his Opportunity fund) that has a $2-billion maket cap. This company has no debt and is buying back 10% of its stock. He claims that the stock is down 30% to 40% from its peak, and 45% of the stock is sold short.
Frailey comments that massive short selling can be a profit opportunity for the patient investor. "When and if [the company] turns its business around, the stampede caused by short sellers covering their positions will give the stock price a mighty boost."
Frailey discloses that the company is not IndyMac and it's not Corporate Executive Board, "whose shares fell from $111 to $73 - and then to $60 in late April, when first-quarter profits failed to live up to analsts' expectations."
Do you think you know what the stock is? Frailey comments that we'll know the name when the Opportunity fund issues its June shareholder report. If you know (or think you know) comment here.