Hythiam: Strong Buy Rating Reaffirmed

HYTM remains on the strong buy list at Ebeling Heffernan as we consider raising the price target given the recent news from the company. HYTM signed a 3 year deal with Ford Motor Company (NYSE:F) for 3 years. This revenue has not been determined as yet, however given the new low cost operating model introduced at HYTM we expect to see profitable quarters commence in 2010.

An added bonus on HYTM is the exceptionally large short position that has grown out of speculation the company would fail to meet NASDAQ listing requirements, given the the placement made for $7m in cash that now removes the capital issue, next issue, the $1 bid price. The institution putting $7m at risk would have gone to great lengths to assure that HYTM would be compliant with the $1 rule very soon.

We now expect HYTM to exceed $20 per share in 2010.

LOS ANGELES–Hythiam, Inc. announced today that on Tuesday, September 22, 2009 it closed the previously announced registered direct placement of 9,333,334 shares of its common stock to institutional investors at a price per share of $.75 for gross proceeds of $7 million. Investors also received warrants to purchase 2,333,334 shares of the Company’s common stock. The warrants have an exercise price of $.85 per share and are exercisable at any time after the closing of the transaction and before the 3rd anniversary of such initial issuance date.

- livetradingnews.com

Disclosure: Long HYTM