Tom, I think you have some bad analysis on your hope for a short on IPO day. If MALL is shorted who cares? MALL doesn't control UBID, UBID controls MALL. If MALL is shorted the best I think you could hope for is to widen the premium people will pay for UBID.
In your scenario people are going to short MALL and bring down UBID, have you ever looked at the flip side.(I doubt it because it's real bad for your short position.) What if someone accumulates a big position in MALL over the past few weeks or even the next few days. On IPO day maybe there's a small sell-off of UBID. I really don't think it will be that great, the float is just too small and people are in way more of a frenzy now than when TGLOBE came out. During the sell off i'm sure the shorts will try to attack MALL. As soon as the sell off is over we get a bounce. Even a dog like CMPL bounced from $17 to $25. During that bounce a lot of people are going to get on. Many think this could be EBAY, they're completely wrong, but a lot of people are scared of missing out on the next big thing. To hell with those people, we'll discount them for your benefit. What if someone or a few someones that own a lot of MALL start buying the hell out of UBID. They could easily drive the price to $100+(if it's not there already), and once it starts going the frenzy of followers and wannabe's will carry and sustain. Remember small float, small float. This will pull MALL up, squeezing the shorts, which will also drive it further. The manipulators could then sell their MALL and still keep UBID up by pumping very little if any money into it. There's no defense against this. You can't short UBID because it's an IPO. Shorting MALL, again, won't pull UBID down, it'll just create a buying oppurtunity. Normally this wouldn't be possible but it is right now. The frenzy we're in, the screwed up differential in floats between UBID/MALL, the fact that MALL has pre-announced the spin-off, I would really hate to be short this, even long term.
You also seem to think that MZON is going to go up bigger than MALL this week. If that's the case wouldn't the wise, unemotional thing to do, be to take the smash on the MALL short and take the money you free up and put into MZON. Then after you've ran that money up, if your still hellbent on shorting MALL, short it at a better price.
Finally you keep mentioning EWBX and TGLO. EWBX is 44 and TGLO 39 5/8, both well well above their IPO price and they are complete dogs compared to UBID.
EGB |
