Pre-Paid's Pickle Gets Juicier

Fil Zucchi, a fund manager who writes for Street Insight, had wondered about the building's cost from the onset. Zucchi, who has a background in commercial real estate, determined that Pre-Paid was paying $160 per square foot (based on the $28.4 million price tag for the 177,500-square-foot building) in a town where new construction costs a fraction of that amount. To back up his claims, he pointed to the ADA Jobs Foundation Web site pegging industrial construction -- which can run about half the price of commercial building -- at $17 to $20 per square foot. Commercial lease space is an even cheaper $1.80 to $2 a foot.

"Inflation, I guess," said Zucchi, who is short Pre-Paid's stock.

Of course, other short-sellers have long accused Pre-Paid of recklessly blowing funds with little regard for shareholders.

"These guys are one jury decision away from being insolvent," another fund manager said. "And they won't be able to raise money or borrow money after that happens."