Richard, Re: " With accelerated activity I suspect that many more shorts will return soon ".
Here is from the Wall street Journal today:
Presstek Sues Short-Sellers,
Alleging On-Line Defamation
By WILLIAM M. BULKELEY
Staff Reporter of THE WALL STREET JOURNAL
CONCORD, N. H. -- Presstek Inc. sued three people it identified as
short-sellers for posting what it said were defamatory and inaccurate
statements about it in on-line chat groups.
The lawsuit, filed in U.S. District Court in Concord, N.H., claims that
the three individuals posted a variety of false statements about the
company in the hope of driving down the company's stock. The suit says
the false reports included that Presstek was the subject of a grand-jury
investigation; that it would lose money in a quarter when it actually
made money; and that its auditor was about to resign over
revenue-recognition issues.
Archive Links
Will the Threat of Libel Chill Gossipy Cyberspace Chatter? (Aug. 29,
1997)
Chubb Looks to Protect Firms From the Net's Legal Hazards (Aug. 26,
1997)
* * *
Presstek and SEC Staff Reach Tentative Deal on 3-Year Probe (Aug 20,
1997)
HEARD ON THE NET: Presstek Shares Soar Again, Amid Burst of On-Line Talk
(June 7, 1997)
Presstek Shareholders Sue, Alleging Scheme to Boost Stock (Jul. 1, 1996)
Lutts Faces SEC Probe Into Alleged Manipulation (Jun. 6, 1996)
Short-sellers sell borrowed stock and profit when the stock's price
declines. The suit doesn't ask for specific damages, but seeks recovery
of Presstek's legal costs and repayment of any profits the short sellers
made.
The defendants -- Ivan Lustig, of Greenwood, Colo.; Mark Hollingsworth,
of Hampton, Va., and Parag Patel, Hamilton Square, N.J. -- all deny the
charges. Mr. Lustig said, "I feel any representations I made
characterized Presstek in a fair and accurate way." Mr. Hollingsworth
said, "Anything I've posted, if it wasn't fact, I feel certain it was
stated as opinion." Mr. Patel said, "I did make the comments, but they
were made in good faith based on research I had performed."
In addition to shorting Presstek's stock, Mr. Hollingsworth has gone as
far as launching a new company to compete with Presstek's printing
technology and challenge its patents.
Presstek, in Hudson, N.H., has developed an innovative printing plate
used by commercial printers. Its stock has been a favorite of
short-sellers because of its wild rides -- during the past year, it has
traded between $19.75 and $54. The company is frequently discussed on
the Motley Fool (http://www.motley.com/) electronic bulletin board,
available on America Online and the Internet, and on the Silicon
Investor Internet Web site. Wednesday it closed at $43.75, up $1.625 in
Nasdaq Stock Market trading.
The suit doesn't name any on-line publishers, which has been a
contentious issue in some other Internet libel suits. However, it is a
reminder that libel laws can apply to on-line postings, even though
people often regard chat groups as comparable to private telephone
calls.
Floyd Abrams, a New York attorney who specializes in First Amendment
cases, said the suit is part of a trend of companies filing libel suits
against individuals who aren't members of the press. "One of the dangers
here is that large corporations have a big edge on ordinary folks who
are not journalists, who do not have insurance and who are often unable
to pay for legal advice," he said.
Robert McDaniel, general counsel for Presstek, said, "we don't believe
this suit does anything to chill freedom of speech. We'd like to have a
lot of speech about our company. We only ask that people tell the
truth."
To the defendants, however, it is more evidence their stock predictions
are right. "When companies sue short sellers, it's normally a sign of a
top," said Mr. Patel.
So here it is Richard. Anybody coming on to these threads, shorts or
otherwise, and spreading false information to drive the price of the stock down will be liable to defamation lawsuits ( VERY expenive!!).
Merrill- Lynch as of this AM has no short stock available for borrowing.
They told me that officially Vivus broke out yesterday, and that that is when the squeeze was started.
They look for Vivus to be ~ 40 in one week.
( above is from my broker. Merrill- Lynch has no opinion on Vivus because they don't follow it ( yet !!!!, gg ).
I added to my position this AM: For new money coming in, let's see,
33 to 40 = ~ 25%: that ought to beat the S&P don't you think?
TA
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