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Would an analysis of JCOM short interest really get to the heart of the issue without discussing unregulated hedge fund activity? Hedge fund activity can be used to attack a small company by manipulating the market and by spreading fear on message and discussion boards. Activity that if exposed or regulated would at best not be permitted and at worst would violate security laws.
How can you tell if there is manipulation? Look at the trading activity and correlate it with technical analysis to see if there has been a conscious effort to suppress a free market in JCOM stock. Can it be called market manipulation when heavy short selling by hedge funds, already carrying heavy losses on the books, takes place at the exact critical times when an observer of the open market would expect, based on news or market conditions, the stock to perform strongly? Could message board posts at those exact times lead to hidden agendas and IP addresses powered by vast amounts of money? At what point does such timed short selling and fear spreading become manipulation? The transaction history record of JCOM and other small companies that have fallen victim to such trading at specific pivot points contain the answer.
Who belongs to the small club of hedge funds that hold $5,000,000 to $75,000,000 short interest accounts in JCOM? What trades did they make at those specific points in time when market manipulation appears to have taken place?
Perhaps we will find out. Perhaps we won't. But JCOM will not cooperate fundamentally like shorts initially thought that it would. It has captured $100 million of a multi-billion dollar market and is expanding now internationallly. Growth continues with no sign of stopping, and fundamentally JCOM is in the top tier with no mishaps on its record.
This former "target of a hedge fund short attack" keeps getting stronger and stronger, and now has the cash and free cash flow to transform itself into the world leader in the unfolding unified messaging market that lies beyond the fax to email niche.
Let us put an end to the manipulation by identifying it and reporting it. Let there be justice for traders who see clearly that JCOM should sell at a higher multiple of earnings. Take your short interest losses like responsible investors; let short interest as a percentage of float approach the levels that reflects prudent market transactions instead of unbridled greed and manipulation. Join in the ownership of a company that means business and performs as if they plan to stay in it.
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