AOL Looks Like a Big Juicy Short

investorplace.com ^ | April 10 2012 | By Tom Taulli, InvestorPlace Contributor

[NoLibZone]

Monday seemed like a time warp back to the giddy 1990s as AOL’s (NYSE:AOL) stock spiked by 43% to $26.40. The company announced that it sold over 800 patents to Microsoft (NASDAQ:MSFT) for a cool $1.1 billion. Earlier expectations on Wall Street were that the intellectual property would fetch just a few hundred million.

However, investors should be wary of AOL’s current stock price. On Tuesday, the shares were already trading around 4.5% lower at midday. Apparently, at least some of Monday’s spike was from a short squeeze, when short sellers rush to close out their positions, forcing them to buy heavy amounts of stock.

[Seaplaner]

I don't do short sales, but if I did, I'd consider AOL and GM.

(This is NOT advice, don't believe anything I write about investing.)

[green iguana]

I don’t recommend anyone do short sales - buy puts instead. All you can lose is the cost of the put.