From: Linda (firstname.lastname@example.org)
Date: Fri Sep 15 2000 - 21:13:04 PDT
Adam, you might be interested in this:
Will Its Jump to the NYSE Save 4Kids From the Shorts?
By Herb Greenberg
9/15/00 8:30 AM ET
Kid's play: Next week 4Kids Entertainment (KIDE:Nasdaq - news - boards)
is shifting over to the New York Stock Exchange from the Nasdaq, in
part, it says, because it likes the NYSE's more restrictive rules
regarding short sales.
No surprise, because 4Kids has been a favorite of short-sellers who are
betting against the company, in part because of its huge reliance on
Pokemon. Short interest as of Aug. 8 was 42% of the company's float.
It's unclear just how much more anti-short-seller the NYSE is than the
Nasdaq. Both only allow short-selling on upticks.
But the NYSE thinks it has the edge over the Nasdaq in favoring
companies, because it only allows shorts based on the last sale price;
the Nasdaq, by contrast, allows shorting at the last bid price, which
means you could have several downticks before the bid is hit, during
which people could sell short, in violation of the short-sale rule, says
one NYSE official.
Maybe so, but switching to the Big Board is no guarantee that a stock
will be substantially less volatile, or that short-sellers will somehow
magically disappear. Or that a stock won't fall. In fact, in recent
years a number of companies have made widely publicized moves to the
NYSE when their stocks were at or near their peaks. (You can almost hear
them saying, "Eureka! We've made it! We're legitimate!") Among the most
memorable: Iomega (IOM:NYSE - news - boards), which is still around, but
is much, much lower than it was when it made the leap; CHS Electronics,
which is in the process of being liquidated; and Planet Hollywood, which
was relegated to the bulletin board after filing for bankruptcy.
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