After its Q2 earnings report was released last night, Obagi Medical Products (NASDAQ:OMPI) took a dive this morning, down 22.5% just after the bell. The company improved revenue and income from last year, up 6% and 17% respectively. The company maintains its full-year outlook, expecting $119MM to $124MM in net sales, and $0.58 to $0.62 EPS. Second quarter results and 2012 outlook are largely in-line with analyst expectations. The 11% short population, on OMPI’s extremely low float, pushed share price down this morning as investors who have long been anticipating a buy-out for OMPI let their nerves get the better of them. OMPI peaked at $18 in June on the buy-out rumors, setting a new 52-week high. Today’s sell-off – shares are now at $11.50 – is overdone on this cash rich and positive cash-flow company and should be seen as a buying opportunity. It may be some time before OMPI returns to its $18 high, but today’s price presents a discount.