BMY is doing it. GM did it. OSTK did it. BVF did it. Skilling and Lay did it. Hey, what a great idea! Everybody’s doing it so why not me? Whenever I screw up in life I am going to blame it on short sellers and while I am at it, let’s just be more specific and blame it on hedge funds who are selling short. Yep - I am being cynical (again.) I just cannot stand the idea that a company can point fingers at short sellers when there are fundamental and technical reasons for their stock declining. And whenever I hear this excuse, it really causes me to question what else is wrong with the company that we don’t know yet?

In BMY’s case (and the other examples too), it’s almost laughable that they don’t think it was credible for people to be selling their shares. Plavix is the second best selling drug in the world and about 30% of BMY’s sales. The fact that they thought it would be ok to pay Apotex money to keep its FDA approved competitor off the market might have been a clue. Yeah - I know - BMY is claiming that somehow those mean short sellers had inside information about the anti-trust investigation into this agreement before it was disclosed to the rest of us on July 28th. They point to the doubling of short interest from June to July 11th.

So here’s a question - why are they only complaining to the NYSE today? If they and the rest of us noticed this increase in the short position when it was published on July 11th, then why not complain then? And if not then, why not on July 28th when the Apotex deal was revealed? Why wait until today? Here’s my theory - people love to hate shorts, but only when the shorts win. BMY went up marginally from mid-June until mid-July when this short position was being amassed. When the shorts lose or get squeezed, there is a joyous (almost sick) gloating that goes on. However, when the “dark side” wins - then it’s time to play the blame game. Investigate away!! Maybe you’ll find that there were numerous legitimate reasons to sell the stock, not buy the stock or short it.

One last note on this subject for now. Hedgefolios has had a DOWN signal on BMY since 5/22/06 (before the period in question!!) From that date until July 27th, I was wrong and did not complain that the “long buyers” had inside information that was unfairly causing the stock to go up. And, NO, I didn’t have any inside information about their payoff to Apotex. Just good old fashioned analysis that said this stock had more downside risk than upside potential. And if my signal contributed to one mean short selling hedge fund borrowing 1 share to sell, then I am proud in a somewhat gloating kind of way. My apologies to the BMY longs of course. But let’s not be confused about the real issue here - this company is in danger of losing about 30% of its revenue. Shorts have nothing to do with causing that.