Pegasus Wireless, a company nominally based in Nevada but which does most of its business in Silicon Valley, has got the discussion going again on short selling. The company, reports the New York Times, issued a dividend of a kind early last month.

It was a stock warrant but they were only be issued to real investors and not to brokerage houses that held the stock in accounts. The company played dumb, notes the paper, but everyone else assumes the whole point of doing this is to punish the short sellers by creating serious demand for the stock that will have to be moved out of those accounts.

In other words, the short sellers who “borrow” stock from brokers would not be eligible. Better still, it would hit them hard because the price was going up not down. “It squeezes the shorts, but it also squeezes the brokers,” Hale Lane Attorney David Garcia tells the paper.

CEO Jason Knabb says he’s not like Overstock.com, alluding to the campaign against short selling launched by that company’s CEO who feels his company was hit badly by the short sellers. Maybe, but the question is whether the short selling is a conspiracy or a natural action of the market. If people thought a company were strong and getting stronger, it’s hard to short it. If there’s doubts in the market, on the other hand, it’s not hard at all.