The shorts will have three choices in the coming weeks:
l) cover at their discretion, 2) cover at their broker's
discretion, or 3) cover and go long, which is the savvy
play.
Well then I'll direct it you again: If it's really just as simple as that, and any company can just arbitrarily force its entire short interest to cover for any reason or no reason at all other than to temporarily prop up their share price and hurt short sellers, why do we not see more companies doing this? (Dale: What if ZIXI did this?)
Can you even name two other companies taking advantage of this or claiming to be? I could name one, but they'd probably add me to their lawsuit if I actually did.
Indeed, why does short selling exist if a company being shorted, regardless of how weak their business, can just screw their short sellers over so arbitrarily?
If Jacobs' characterization of the share swap and coincident forced covering as a "done deal" is as accurate as you seem to think it is, it's not "savvy" to be long, it's a complete and total no-brainer.
And that's the whole problem. If this is such a sure-fire, can't miss guaranteed big win in just a few weeks' time, how is it that the stock managed to actually go down yesterday? Do you think that there were enough shareholders stupid enough to sell this thing "knowing" full well that a big buyout courtesy of the shorts was imminent? Or that somehow they don't know about the impending deal, in spite of it being blared all over the message boards and the real-world press (the latter courtesy Mr. Jacobs)? Shorts can't force a price down, the uptick rule sees to that, so there must have been some longs selling yesterday. Why in the world would they do that, if "everybody" knows what's coming?
Questions, questions, so many questions. So few answers. Maybe "due diligence" actually extends beyond taking the words of AREM and Irwin L. Jacobs as gospel. You never know. |
