Replies to post #198292 on Wave Systems Corp. (fka WAVXQ)

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lugan.....Short Share Price

I don't think you can come up with an average short price using your numbers. They may hold for current shorts, but the question is the age of all of the shorts. We may still have shorts from the $40.00 range. Only the shorts could tell us. They hope the stock becomes worthless and they would never have to cover. Technically they would not have to pay any taxes on their short profits, but I believe that loop hole has been closed. I have been told if a company goes bust, then all of your stock positions are considered closed and taxed at that point.

With the short volume holding at 7.5 million, where did the additional 3.5 million for the rebalance come from.

This is a ticking time bomb for the shorts, they need to create more confusion so they can get people to panic and bail. September will be interesting.

JMHO

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lugan on oustanding short position,

as the reported short interest is a snapshot we know very little about when the postions were actually established.

1. Considering that there are some 10 million shares of warrants far into the money (an ave strike of 75 cents cents rings a bell) a lot of short interest could be against the box, simply having locked in a gain, with no real requirement to cover at any time (less the warrant expiration date).

2. Obviously the options market can effectively hedge a short position, although this would have to play itself out over the duration of the contract.

It may be that the MMs went massively short on rebalancing, it may be that others went short, it may be that warrant holders anticipated the volume and went short against the box (in which case they are effectively covered) ... who knows. Its hard to forecast much of anything based on short numbers with Wave, in the past it was largely governed by PPs, presently it may well be goverened by warrants.