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).