See the chart of DRL regarding recovery after dips in the past. See how the shorts sold a ton of shares at $19.50, and how even if the stock would recover a $1 or so they would still be profit. See the change in the company in the wake of the private equity group. See the new loans % increase. See the expectations to turn profitable. Note the interest rate reductions which I believe benefits them greatly. Note how $1 is being paid for the calls that the price will go above $50 by Jan 2009. ($1 is because you can sell 20 options at $.05 for each 100 shares, given the 20:1 reverse split).
Now, a month later, DRL is down to $18.04, which I believe will almost inevitably recover within days. See again DRL's track record of recovering on the dips & the speed in which it happens (including the pre-mentioned February recovery). To add icing to the cake: A) Since my February postings, other good news has come out on DRL that caused the stock to reach (hit $22.03 on February 27th--actually the public got the news only the next day.) B) We are just days away from the anticipated 10q (expected on Friday), which I believe may already show favorable results & likely to have no more of these one-timer write-offs. C) We are less than 2 weeks away from the next anticipated interest rate cut, which to my understanding has a major positive impact on DRL's mortgage portfolio.
Yesterday there were some liquidations. Today, the price is $18.75. Moral of the story: buy DRL on dips.
Today, DRL closed at $19.62, about a 9% gain in 4 days from the $18.02 price (had I called the bottom, it would have added another 4% or so).
March 18, DRL closed at $21.18. Today, DRL closed at $19.13, which I believe is a great buying opportunity again--assuming they already got enough people to liquidate today.