EarthLink Holdings Corp. (NASDAQ:ELNK) Heavily Shorted on the Earnings Hype

[[tagnumber 0]]The stock of EarthLink Holdings Corp. (NASDAQ:ELNK) spiked out of the range in just two trading sessions this week. The hype that was create[[tagnumber 1]]d around the stock on the company‘s first quarter earnings released on Tuesday seems exaggerated though and traders took advantage of it by shorting massively ELNK shares.[[tagnumber 2]] [[tagnumber 0]]Yesterday, ELNK closed the market at $5.69 per share on a total trading volume for the day of almost 2.5 million shares. That makes the total gain for the past two days following the publishing of the 10–Q report come up to over 17%. ELNK has attracted the interest of traders with its revenues surpassing analysts estimates and a loss significantly lower than expected.[[tagnumber 2]] [[tagnumber 0]]The positive surprise factor was huge, however, it still does not make the stock a good long–term investment as the com[[tagnumber 6]]pany has actually not shown any growth in the first quarter. According to the quarterly report, total sales are down 5% while operating cash flow is lower as well.[[tagnumber 2]] [[tagnumber 0]]ELNK has manged to optimize the operating costs only for the business services segment, and considerable part of the total improvement in the net loss resulted from the writing off of some impaired long–lived assets during last year‘s first quarter.[[tagnumber 2]] [[tagnumber 0]]Technically, ELNK could break up higher today as the number of shorted shares has nearly doubled on Tuesday and Wednesday. Trading volume started to decline though, thus a major pull back at the beginning of next week seems inevitable.[[tagnumber 2]]