Shares of Tempur-Pedic ( TPX) rose 4.4% Wednesday in a down tape without any clear catalyst. What is clear is that the significant number of shorts in the Lexington, Ky.-based mattress maker find themselves in an increasingly painful position. The company released an 8-K filing Wednesday, but analysts and market participants did not find a clear correlation between the filing and the rally. "The 8-K does not explain the rally," says Barry Hytinen, investor relations chief at Tempur-Pedic. "The only news yesterday was that executives were granted options at a $13.47 exercise price. It's possible that some may have interpreted that as a sign that it would give these guys an incentive, but I don't think it would have pushed the stock so high." The options, 250,000 shares to CFO Dale Williams and 350,000 to David Montgomery, president of international operations, were previously announced, Hytinen notes. It could be that with such a high short interest, some players were forced to readjust (i.e., cover) their positions. In June, there were 19.23 million shorts in Tempur-Pedic vs. 14.63 million in May, up 31%. The short ratio, or the percentage of the free float of its shares sold short, was 22.7% last month vs. 17.3% in May. "It's kind of crazy for this stock to have almost 20 million shares short out of nearly 85 million outstanding. Hedge funds are obviously very involved," says Joe Feshbach, founder of value investing hedge fund Joe Feshbach Partners, who has more than 10% of his $30 million portfolio inveseted in the name from the long side. "It's a deep value stock and it's surprising to find such a large short interest. I am not sure what the downside is." Granted, the stock is down 35% from its $22.44 level of a year ago. But prices have risen 41% since the company announced a substantial repurchase program in October. Buybacks are almost always good news for investors; the stock is up 21% since Dec. 31, although was recently down 0.9% to $14.27.