jurek,

"CLL short position never increased to over 9M .As per last reporting period Jan31/2008 short position was 8,070,276.We will see soon what the February will bring"

I've gotten access to Stockwatch and did research on CLL short history.

CLL - T2006-03-15 9,354,530 -102,003

CLL - T2006-02-28 9,456,533 -277,359

CLL - T2006-02-15 9,733,892 2,579,282

AS you can see, your statement that CLL has never hit a short position of over 9 million is incorrect.

However, with that said,

your above statement was in response to a comment I made

"Yes, however since then, the short position has steadily increased to over 9 million shares and the SP has hovered around $3.06."

you were correct in your response, since the issuance of the debentures in may 2007 the highest short position was,

CLL - T2007-12-31 8,491,282993,844

I was wrong, I remember hearing 9 million somewhere ( which was correct) and applied it to the wrong issue. I was only off by 500k shares.

jurek

" If you read the study you are referring to you would conclude that majority hedging activity takes place just before and short time after the issue is closed. Most gains are realised in first 20 trading days. Hedge funds do not have long term commitments to their positions.

CLL news release dated May 9 2007 stated the following,

Debentures issued with a closing date on or around may 24th with an over-allotment purchase option for 30 days after closing.

These are the short positions covering that time frame

CLL - T2007-07-15 5,562,018 608,763

CLL - T2007-06-30 4,953,255 1,036,493

CLL - T2007-06-15 3,916,762 -542,941

CLL - T2007-05-31 4,459,703 -248,019

CLL - T2007-05-15 4,707,722 -69,607

CLL - T2007-04-30 4,777,329 1,543,559

you will 1st notice a large increase to the short position in the reporting period just prior to the debenture announcement.

you will then notice a decreased short position during the time period between the initial announcement and the 30 day over allotment deal which would end around June 24 2007.

You will finally notice another huge single day increase in the short position during the period the 30 day deal ended.

I'm not an expert in arbitrage so you can make any interpretation of these numbers as you like.I'll go back to my original statement regarding the subject of arbitrage.

"Although I don't necessarily believe this to be the case with CLL, one can see how it may apply"