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Shares of heavily shorted stun-gun supplier



vaulted another 10% in late trading Monday after the company reported a big jump in fourth-quarter sales and earnings.

The Scottsdale, Ariz., company has been one of the great stock market success stories of the last two years, running from about $4 to more than $82 during 2003 and continuing to power higher in the current year. The stock was recently going for $150 on Instinet, up $15.07, or 11%, from its 4 p.m. close.

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"Two thousand three was a great year for Taser," the company observed in a press release.

Taser earned $2.8 million, or 56 cents a diluted share, on sales of $10.8 million in the fourth quarter, compared with $67,498, or 2 cents a share, on sales of $2.8 million a year ago. Two analysts surveyed by Thomson One Analytics were forecasting earnings of 35 cents a share on sales of $6.3 million in the latest quarter.

The company had overall sales of $24.5 million in all of 2003 and said it expects the figure to double in 2004. Adjusting for the after-hours runup, the company's market capitalization is about $480.7 million, giving it a price-to-sales ratio of about 9.8 based on its 2004 guidance.

The stock trades for about 140 times its 2003 per-share earnings of $1.07 and about 121 times the 2004 full-year earnings estimate of $1.21 a share. In a related statistic, more than half the company's float is short interest, a circumstance that has repeatedly caused big gains in the stock in the absence of catastrophic earnings news.

Taser's tiny float of about 2.2 million shares exacerbates the short squeeze.

Taser's story involves expectations police departments will be more apt to buy its products because of terrorism fears. Taser said 4,300 law enforcement agencies were testing or deploying its weapons as of Dec. 31, 800 more than at the end of the third quarter. More than 500 have committed to full deployment.