Whenever you have such a high number of short, my experience has been to tread lightly and definitely trade around your core position. Yeah, the high short interest can help on squeezes until, finally, when what they shorts suspected finally comes to light.
Their 8-k on Friday evening is not encouraging:
On September 20, 2011, Lorence A. Harmer, a former director of ZAGG Inc (the "Company"), and two of his affiliates, Harmer Holdings, LLC, and Teleportal, LLC, filed a lawsuit in Utah state court against the Company, Robert G. Pedersen, II, Brandon T. O'Brien and KPMG, LLC. In their lawsuit the plaintiffs allege that the defendants defamed Mr. Harmer, breached the settlement agreement between the plaintiffs and the Company dated March 23, 2011 and interfered with other rights of the plaintiffs.
In their complaint, the plaintiffs also assert that the United States Securities and Exchange Commission was pursuing "an investigation" of the Company in July 2011 and that the Company is subject to "an ongoing SEC investigation." The Company has no knowledge that the Securities and Exchange Commission issued a formal order of investigation in respect of the Company, the defendants or any operations of the Company in July 2011 or at any time since.
Based on its initial review of the plaintiffs' claims, the Company believes them to be without merit and will vigorously fight them
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