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Technology Stocks : TAVA Technologies (TAVA-NASDAQ)
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To: Emec who wrote (4930)10/29/1997 4:38:00 PM
From: JDN  Read Replies (6) of 31646
 
Dear David: I have been a long time advocate of TPRO stock and have continually been adding to my position but I am just trying to understand why the short position is increasing. Here is one thought that I have. As most know, insiders cannot by law short stock in their company without regulatory permission. However they are allowed to do what is called "Short against the box". That is to short stock they own. Why would they do that? Well first one must assume they have a very low basis to begin with. One must also assume they dont wish to sell the stock as they believe in the long range success of the Company, but in the short term they might feel it will drop before it rises. Thus it gives them some income while they hold the stock. If the stock rises instead of drops they can quickly buy out their short. Up to now at least TPRO has shown great resistance in the mid to high 6's and great support around 5 3/8. So if they short in low to mid 6's they really have a manageable risk situation. IF and I say IF that is what is going on it doesnt bother me too much as at least it means they too have a good feeling about the long term success of the Company. If people are selling naked shorts in the volume I am seeing then I would like to know WHY. Anyone wish to comment? JDN
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