Within an article last week that recapped BEA Systems' (BEAS: sentiment, chart, options) third-quarter earnings results, several analysts stepped forward to opine that they believe the company was still ripe for a take-over, despite the fact that Larry Ellison of Oracle (ORCL) stated that the firm was no longer interested in BEAS. In a research note, analyst Katherine Egbert of Jefferies & Co stated that "Yesterday's report and refiling is good news for BEA, but the outcomes are not so dramatic as to fundamentally alter the value of the company, in our view."

Furthermore, analyst Tim Klasell of Thomas Weisel Partners said he thinks BEA eventually will be sold. "Despite Larry Ellison's recent proclamation that any future bids on BEA would be lower than Oracle's previous $17/share bid, given the consolidation in middleware, we still consider the sale of BEA as the more likely scenario, but we think the process could take longer than previously assumed." Also, Analyst David Hilal of Friedman, Billings, Ramsey & Co. said BEA's strong results "could be a partial reason for Oracle to consider paying more" for the company.

Hopes appear to be running high on Wall Street that the security will be swallowed up by another company. Yet, the stock is in danger of falling sharply if this takeover doesn't materialize soon. The stock has drifted away from Oracle's offer price of $17 and is starting to fill in the gap it experienced when Oracle first proposed to buy the firm. This retreat could see the shares drop back to the 14 area, resulting in a loss of more than 12% before finding technical support.

Meanwhile, the stock is facing little support from investors. The equity's short-interest ratio comes in at a paltry 1.1 times the stock's average daily trading volume. Even if short sellers closed out all their bearish bets, it would provide the security with very minor short-covering support. And, considering the downtrend the shares have stumbled into, these bears currently have little reason to close out their winning positions.