Zeev,
I doubt that companies call up the shorts when news is forthcoming before they call up the large insiders (in fact, I know that they don't <G>). I think what you're seeing is that often rumors about bad news will leak out, and the shorts react to that without waiting for the specific news. In fact, some of the longs may react as well, and you're just lumping them into the shorts. But the longs and insiders certainly hear the same rumors at the same time.
So either the company feels the news is significant enough that it notifies the board, which may include large insider holdings, in which case the insiders know first. Or rumors leak out first, in which case everyone knows at the same time.
So I think you're just seeing reactions to rumors and assuming the shorts "know" something. It's just the "buy the rumor, sell the fact" strategy in reverse. I can't imagine any information path that would, for example, allow negative information about Rambus to get to Bill Fleckenstein or Michael Burke before it got to Stuart Steele. Of course, whatever the rumor was, Bill and Michael would claim that they "knew" it ahead of time <G>.
Dave |
