Thursday Thud:

ZixIt's secret weapon?

:

ZixIt

(ZIXI) - Get Report

, the former

CustomTracks, hasn't been mentioned here for eons. Simply too hot to handle as the shorts and longs battle over the legitimacy of the Texas-based company, which claims to have the most secure software available for transmitting email. (Its recent full-page newspaper ads use the slogan, "Just say ZixIt.") The company was founded by David Cook, the former founder of

Blockbuster Entertainment

(BBI) - Get Report

, the guy who developed the software Blockbuster uses to track its rentals.

Then, a few weeks ago, the company announced that

Wayne Huizenga

, chairman of

AutoNation

(AN) - Get Report

and former head of Blockbuster and

Waste Management

(WMI)

, was leading a group that planned to invest between $20 million to $44 million in the company.

The stock rallied on the news, before falling with the rest of the market, which leads us to the "secret weapon" part of the story: Late yesterday, in an 8-K filed with the

SEC

, ZixIt disclosed who is in the group, and how much they're putting up. Turns out the investors include a large contingent of execs from

General Electric

(GE) - Get Report

led by GE CEO

Jack Welch

, who invested $1 million. GE CFO Keith Sherin invested $99,984, as did GE chief information officer Gary Reiner, GE General Counsel John Samuels and Dennis Dammerman, CEO of

GE Capital

.

Also in the group are

Sprint

(FON)

CEO William Esrey ($99,984) and Sprint President Ronald LeMay ($1 million).

What do they know that the shorts don't? Are those companies, or their suppliers, about to strike deals with ZixIt? Does this mean ZixIt's technology (generally pooh-poohed by the shorts) has been validated? Hard to say. Sprint execs couldn't be reached and a GE spokeswoman would only say that they're "personal investments." But hey, no matter what it means, it certainly belongs in the "worth noting" category.

Market mania:

Yesterday's item on

Cisco

(CSCO) - Get Report

mentioned how you could buy the entire utility industry with Cisco's market value.

Silly me. That money also could've been buying the grocery industry (which it is) and much of the retail industry (which it also is). What else could explain Wall Street's sudden infatuation with

Sears

(S) - Get Report

, whose stock has leaped 42% in the past four weeks, or

Safeway's

(SWY)

43% rise, or even the rise at

Whole Foods Market

(WFMI)

, up 22%? Not long ago, in fact, Whole Foods reported an excellent quarter and nobody cared. What has changed? Back then stocks of grocery stores didn't work. (Something

Cramer

would say.) Now they do. (Also something Cramer would say.)

P.S.: Contrary to what you may think, I don't get joy watching this market collapse. Don't say you weren't warned (here, in fact) about what happens when the shorts are gone. (Nothing left -- no natural buyers -- to cushion the fall!) There's a school of thought, however, that you need some kind of washout to get things back into equilibrium.

What could pass, according to some observers, is that pressure on the Fed to raise rates may at some point lessen. Less rate pressure (or even lower rates, as the months roll on) would be good for the

real

companies -- and even the real-company wannabes. That could set the stage for another, albeit more measured, advance later this year. Or so some say.

Short-sellers, meanwhile, still aren't dancing in the streets. (Not that they would.) Many of the most heavily shorted names still haven't broken down in any significant way. Many of the others, especially the e-techs, have (in the blink of an eye) lost half their market value overnight. (Seen the likes of

Scient

(SCNT)

lately? Off 42% so far this month.)

Meanwhile, this column's benchmarks for a broken market --

Lernout & Hauspie

(LHSP)

and

CopyTele

(COPY)

-- both lost ground yesterday, but not anywhere near enough to sound the all-clear.

Final comment: Investors I talk to are already starting to rummage through the garbage. Plenty of good companies getting tossed out with the trash. Some that are there are trading near, at or below cash! Lemme see if I can grab together a list of

those!

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.