Joe,
Your points are valid. Normally, when management starts to whine about being misunderstood, it is time to head for the hills. (Same as when a thread starts to grumble about the stock being manipulated by market makers). However, when there is as large a short position as here, there tends, not coincidentally, to also be a lot of misinformation flying around, and so maybe a little justifiable whining by management is allowed. Although management may have been playing the PR game, they can't be accused of inactivity on the product side. We have to wait and see whether inactivity would have been better <G>.
Similarly, your trading cost argument is valid, as is the potential for inter-company conflicts of interest.
One interesting point is if you end up with a $3 stock it would be non-marginable, which would add to the shorts' concern. (In practice it may end up in people's margin account anyhow and so not be a big deal). I'm not predicting an actual squeeze here, just that I think the stock may get some short-term support if a bunch of shorts decide to cover ahead of a spin-off. Medium and long term, of course, the stock price will live or die based on its fundamentals, not the management's or the shorts' view of things or whether there is a spin-off or not.
Peter |
