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Technology Stocks : PALM - The rebirth of Palm Inc. -- Ignore unavailable to you. Want to Upgrade?

To: jackhach who wrote (719)	5/27/2000 2:50:00 PM
From: David E. Taylor	Read Replies (2) \| Respond to of 6784

JH & Ian: But are the investors sitting on short positions going to wait until after the 7/27 distribution and the abundant availability of PALM shares to cover their short positions? I think not. Either they were short PALM simply because they felt PALM was overpriced, or because they realized that as long as PALM's market cap was greater than COMS's there was little likelihood of PALM's stock price staging a recovery, or they were short as part of an arbitrage position where they also went long COMS at some point. But the closer we get to 7/7, and the more the relative valuations of COMS/PALM come into line, the less possibility there is of a further decline in PALM's price. So if you have a PALM short position, you're going to think about covering that position once you see the downside in PALM as limited and the upside a real threat to your profits. IMO, that point will occur well before the 532 million PALM shares hit the market on 7/27, whatever the original rationale for any short seller's position. So it seems to me that the present 50% short position in PALM could well cause a run up in PALM well before 7/27. Someone eventually is going to blink, and we could easily wind up with a RMBS type situation with no-one willing to sell PALM to short coverers out of the current float. I may be dead wrong on this and both COMS/PALM may well sink slowly into the sunset over the next 6 weeks, but I think not. Time will tell. David T.