Tuesday's tales (or more distressing news):

Return of the Iridiots:

David Faber

had it first yesterday on

CNBC

, but I still gotta mention it. After a three-month hiatus,

Iridium

(IRIQE:Nasdaq) unexpectedly began trading yesterday, closing at 2 3/8 on the pink sheets. That got the Iridium board on

Yahoo!

buzzing once again with such posts as "prepare for ignition" and "one little announcement could make the shorts panic very quickly." There's also a post or two saying somebody ought to sue Faber because there's no doubt, in their minds, that he's short the stock himself. (Relax, David, they say that about me

all

the time. They don't have a clue. That's why they're called

Iridiots.)

Never mind that its bonds trade at around 6 cents on the dollar, or that its bank debt trades at around 20 cents on the dollar. Never mind that the company itself warned investors in the existing stock that they're likely to get little or nothing if and when a new stock is issued after it emerges from bankruptcy reorganization. The pros (including some bondholders I know) say bondholders, who are ahead of stockholders in the investment pecking order, may even wind up with nothing.

Herb's Latest: Join the discussion on

TSC

Message Boards.

So, who's buying? Well, there are the Iridiots. Then there's one short-seller I know who was buying to cover his position -- but not because he believes the stock has value (he doesn't). He merely wants to lock in profits and protect himself against the risk of irrational volatility by Iridiots as his trading year winds to a close.

Game of chicken?:

Pillowtex

(PTX) - Get Report

,

no stranger to this column, is in better shape than Iridium: At least it hasn't filed for bankruptcy. (Yet. And maybe it never will.) But investors in its convertible notes are in a dither because the notes are supposed to be convertible into cash and stock. But Pillowtex doesn't have much in the way of excess cash to pay the notes. So in a letter to bondholders, it has issued a unilateral moratorium on converting the notes.

With the conversion on hold, the noteholders become unsecured creditors, just like any other supplier to Pillowtex, which makes towels and sheets under a number of well-known names, including

Fieldcrest

.

Here's where the game of chicken comes in. Technically, the noteholders could join with two Pillowtex suppliers and force the company to file involuntary bankruptcy. But the convertible noteholders are the lowest rung of the capital structure. To force Pillowtex into bankruptcy could be suicidal, one distressed investment pro told me, because their notes "would get little in a restructuring."

The real force will come from banks and other lenders on the hook to Pillowtex for more than $1 billion. Some of that debt is being renegotiated. Those lenders can give the company a few months worth of breathing room, our expert in distressed securities says, or they can call the loans immediately.

If they do call the loans, all the pillows in Texas couldn't cushion

that

fall, and that game of chicken by the noteholders would be over -- but in this game, everybody would probably lose.

Oops, no slight intended:

Yesterday's item on

Artisoft

(ASFT)

and the guy who likes it so much forgot to mention that the guy, Scott Turkel, also told this column back in

July about

TSI International Software

(TSFW)

and why it wouldn't be another

New Era of Networks

(NEON) - Get Report

. At the time TSI was at 23 1/4; yesterday it closed at 53 1/4. (I tell you about a money manager's past hits as a way to explain why I continue to quote him. And regarding TSI, Turkel says he still owns it and expects it to do better next year than this year due to new products.) One other thing: Is Turkel the only money manager out there who is willing to go on the record with out-of-favor stocks, tech or otherwise, that he believes he'll be proud to have put his name on? I welcome suggestions. Just don't try to pump-and-dump me if you know what's good for you.

Board banter:

No shortage of opinions on whether

TheStreet.com

should have

ticker-based boards. Most posters (and I) agree:

TSC's

boards should be for paying subscribers only, and that includes

no

free-trial subscribers. Would do much in keeping out the riff-raff. Wonder what

Cramer

thinks of that?

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 at

herb@thestreet.com. Greenberg also writes a monthly column for Fortune.

Mark Martinez assisted with the reporting of this column.