Rock Creek Pharmaceuticals Inc. (fka RCPIQ)

[thefamilyman]

My responses below...

What I meant was that the shorts would cover before the record date if given enough time. Setting a record date two or three weeks in the future would cause a squeeze, but the products would still be given away. Only the slowest of the shorters would have to buy the products. Setting the record date as of the day before the announcement - perfectly legal - would screw the naked shorts and discourage them from ever doing that again.

You make some valid points.
1) If you set the record date too far in the future, the shorts might get away from having to buy the vouchers to fill our product dividend. However, in the process of "getting away" they would almost certainly drive the price up significantly. If you give them a month's notice, that's an additional ~1.4 million shares per day on the buy side in the face of a significant product dividend? I've got to believe that most longs will be looking forward to that product dividend and will not be interested in selling.
2) If you set the record day as the day before the announcement, then the shorts will have to buy the vouchers. But since they are already on the hook for the vouchers, they will not be in as big a hurry to cover. That would inhibit the short squeeze and probably help keep the share price contained. Although the threat of additional product dividends in the future would probably cause a lot of covering in the weeks that followed.
3) We could try for the best of both worlds... Set the record date as 1 to 3 days after the announcement. That should result in a substantial short squeeze and still have a respectable number of shorts left that have to buy vouchers. I don't see any way that 28 million shares get covered in 3 days.

It might still be worth it as advertising and discouraging future shorting even if the company gives all of the product away.

Agreed