Shrotriya has been unable to produce business results strong enough to convince shorts to cover their Spectrum positions, which have been rising steadily all year and now represent about 60% of the company's freely traded shares.
So, in what looks like a desperation move, Shrotriya has orchestrated a year-end, special cash dividend of 15 cents per share payable to the company's shareholders.
Call it Spectrum's Christmas short-squeeze special.Maybe the dividend ploy will work, at least in the short term. Spectrum shares reacted well this morning, up 3% to $11.10. Longer term, investors generally see through cynical moves likes this and start to worry about what Spectrum is trying to hide. The granting of a special dividend at the end of the year could easily be a warning of weak fourth-quarter earnings. Recent Fusilev sales don't inspire confidence, with $25.4 million in October sales reported by Wolters Kluwer, down from $26.1 million in September, which was down from $29.7 million in August. That's a trend heading in the wrong direction.