Jim:
We have played this song before several times with TLTK. The question you ask is a good one and the answer is now obvious. TLTK has had a very predictable run up over the past 2 - 3 months, with nice plateaus and pullbacks followed by surges. In fact several members of both AOL and SI describe the tech analysis as classic textbook. Because of this predictability, a number of players are in and out of the shorts. The short position is easy to take because the upside volume cools down, the information about revs/earnings has already been made public by Tom Mills, and the long range prospects for TLTK are only in the upward direction. People are making good money shorting TLTK. Since the float is only about 9,000,000 shares and AOL accounts for about 1.5 million that leaves 7,000,000 shares. On a good day TLTK volume is 500,000 shares (250,000 on the buy side and 250,000 shares on the sell side). The outstanding shorts on TLTK, the last time I looked was ~500,000 shares, which equals one days trading volume. These shares account for `7% of the TLTK float (500,000/7,000,000) which is enough to influence the share price when the trading volume is below the short shares. That is part of why the stock price has drifted down. However, what a nice recovery today at the end. There are no surprises concerning TLTK, only those created by people shorting the stock to make us small investors nervous and dump our shares. We, in effect, play right into the hands of the shorties.
Hope this is helpful.
David |
