Is There No Alternative to Net Overexuberance?

Cramer can't find a way to combat this variety of Net enthusiasm.
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You want to short these e-stocks?

You read that

SkyMall

(SKYM)

had a sevenfold increase in Internet sales in 1998, but you know that represents only 3% of total revenue.

You know that its almost 200% increase in price, plus the accumulation it has picked up today, seems almost like a joke. (But it isn't, of course -- many apologies to SkyMall and its many enthusiasts.)

You think that even if you worship at the altar of SkyMall the stock deserves to sell a tad lower.

What can you do about it?

Nothing.

SkyMall is up, in part, on a short squeeze. You can't borrow the stock. I tried and failed. I wanted to sell 25,000 shares of SkyMall short here, with the idea I could cover it down five or six.

But I can't find the shares to borrow that I need to make the transaction work. (This is the same hypothetical exercise I did on another company in a notorious appearance on

CNBC

.)

I have no desire to short SkyMall. I don't know enough about it, and I don't short on valuation. But, if I wanted to, there is nothing much I could do about it. Without a "borrow," you can't legally do the trade.

That's the problem with a lot of these vicious up moves. Others don't do what you are supposed to do before you put on a short -- they don't call stock loan from their custody firm. They just sell the stock short and figure, "What, me worry?"

That's wrong! That's illegal. You can't do the trade. If you do, you won't be able to send out the shares to the guy who bought your short. The trade will fail.

So what can you do to profit from the overexuberance of some of these Net stocks when you can't borrow them and they have no options (you could buy puts on them if you wanted to)?

Nothing. Not a ^%$#@! thing.

James J. Cramer is manager of a hedge fund and co-chairman of TheStreet.com. At the time of publication the fund had no positions in stocks mentioned in this column, though positions can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column.