From the period of 12/15 to 12/31 the number of shares short dropped from 5.8M to 5.3M. That coincided with the companys early indication on the morning of 12/28 that Q4 eps would be approx $.70. Now from 12/16 - 12/27 total volume was 2.8M shares and from 12/28 - 12/29 (no trading 12/30 and 12/31) total volume was 2.2M shares. So when do you think shorts covered the 500K shares they did from 12/15 to 12/31? If you answered on 12/28 and 12/29 following the early indication of Q4 results you're probably right. The most important thing to realize is that if the short thesis of the company cooking the books was right, then why in the world word any short cover?? Wouldn't they just short more?? Instead, only about a week later a very speculative report comes out which specifies that the writer holds a short position and has repeatedly shown its effects over the last 2+ weeks. We're bound for a sharp spike up, but right now we're in a hold your nose and either buy or don't sell position. However, whatever you do don't liquidate as the point of capitulation is nearing and massive gains from the current levels will be had.