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Non-Tech : Any info about Iomega (IOM)?
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To: Edmund Lee who wrote (4585)7/18/1996 9:37:00 PM
From: Jeng Chiu   of 58324
 
While its true that the Shorts will have to cover sooner or later, you're assuming that more people won't short the stock.

For example, let's say that you've short sold IOMG. Earnings are in line but disappointing for a company w/ such a high valuation- what are you going to do?

Cover right away? Yea right. The reason they haven't covered already was because they were waiting for earnings. You know that people who have bought on momentum the last few days, hoping for blowout earnings, are going to start dumping this like crazy. So if you're already short, you stay back and let the bottom fall out.

You also forget that w/ these "dissapointing" earnings, there will be new people short selling the stock. Why not? everyone knows its going to fall tomorrow. It's a matter of how much. With new short sellers selling, old short sellers waiting for a bigger drop, and momentum players taking profits, this thing will fall to around the low 20's, maybe lower.

Just my opinion.
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