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Dow Jones S&P 500 NASDAQ 10-Year Note
10,471.50 1,106.41 2,190.31 35.40
Oil *
71.66
UP
65.67
UP
4.06
DOWN
0.55
UP
0.58
10 Yr
3.54%
SPDR Gold
109.32
+0.63%
+0.37%
-0.03%
+1.67%
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Commentary: Herb on TheStreet
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Will Its Jump to the NYSE Save 4Kids From the Shorts?
By Herb Greenberg
Senior Columnist

9/15/00 8:30 AM ET


Items, Away:

  • 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.

  • Oil slick: On Thursday, I asked for anecdotal evidence of the impact of higher oil prices. Not a landslide of responses, certainly nothing like when I asked for evidence of an economic slowdown. But this letter is worth all of those that didn't come in. It's from James Nalepa, who writes:

    I don't know about everyone else, but for my family, costs have done nothing but go down for the last year. Yes, the housing market and the Nasdaq (precrash) gave us a ton of spending money, but even with the retreat of the market and the increase in interest rates, my costs have gone down and my free cash flow for investments and savings has gone up.

    Once you factor in the effects of companies like priceline, which has dramatically lowered my food bill and would have lowered my gas bill if N.J. wasn't stuck in the 1950s with their gasoline laws, you have to realize that there are many factors that are causing inflation to remain low. Advances in technology and biotechnology are happening so fast that even as salary costs may be rising, my productivity is rising even faster. We just put in new servers that reduced certain jobs from four to five hours to 90 minutes. That's almost a three-hour gain in productivity just from a faster computer. Yes, it is inflationary to see gasoline at $1.70 or higher, but compared to the rest of the world, we have some of the cheapest gas around.

    And the car makers and buying public will eventually respond by buying smaller SUVs or making the current ones more efficient. ... It sometimes seems impossible to believe that we can have tremendous growth, low unemployment and low inflation -- but it seems to be happening right now. Even though I can't get a housing contractor to come to the house because they are booked for the next six months and are charging outrageous prices -- every other cost has stayed the same or gone down (excluding oil). Try going to the food store, the mall, an electronics store, etc. -- they are all having sales, lowering their prices or using technology to lower their costs.

    Indeed, they are, James. Grocery stores are giving so many discount coupons to woo me away from Costco (COST:Nasdaq - news - boards) that it feels like pretty soon they'll be giving the food away!

    Are higher oil prices affecting your lifestyle?
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    Herb Greenberg writes daily for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, though he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. He welcomes your feedback and invites you to send any to Herb Greenberg. Greenberg also writes a monthly column for Fortune.

    Mark Martinez assisted with the reporting of this column.


    Send letters to the editor to letters@realmoney.com.
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    Sorry, the page you requested could not be found

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    Content Search:

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    TheStreet Directory

    Dow Jones S&P 500 NASDAQ 10-Year Note
    10,471.50 1,106.41 2,190.31 35.40
    Oil *
    71.66
    UP
    65.67
    UP
    4.06
    DOWN
    0.55
    UP
    0.58
    10 Yr
    3.54%
    SPDR Gold
    109.32
    +0.63%
    +0.37%
    -0.03%
    +1.67%
    Data delayed 20 minutes