Please, oh please, tell me you stepped into SPYR (SPYR) yesterday morning when we delivered an early newsletter pointing out a reversal was brewing. Though the stock opened modestly on Monday, it ended the day up nearly 18%. Better yet, the way the stock ended Monday's action looks as if it was still reaching for higher highs headed into today. This morning's news could readily rekindle those flames pushing SPYR shares upward. See, the company is spinning off a division to existing SPYR shareholders, and it looks like a win-win for everyone... even more of a win the company may muster as things stand now (and we were already plenty excited about the 'now'). Per this morning's news release, SPYR is spinning off its "Eat at Joe's(r)" restaurant located at Philadelphia International Airport. There's nothing wrong with the restaurant itself, just like there's nothing wrong with the mobile game business the company is developing. SPYR just came to the conclusion (and we think rightfully so) in January that both arms would operate better independently of one another, so each division can receive its due focus. In a superficial sense, it's the equivalent to making change. Rather than a $20 bill, you've now got two $10 bills. In reality, this move turns a $20 bill into two $10 bills, but also sets the stage for each of those $10 bills to be allocated more effectively towards growth initiatives that couldn't be addressed when there was only one $20 bill to work with. It's all about unlocking value and providing investor choice. The plan is to issue one share of the restaurant stock for every one share of SPYR in circulation. What we don't yet know is the issue price of the new stock, though it's obviously going to be commensurate. It's all slated to happen in one fell swoop on May 19th. We're excited about it. Both business are compelling, but the restaurant division's potential was largely obscured by the fast-growing mobile games business. There's another interesting detail about the spinoff that wasn't discussed in the SPYR press release which we think could be huge for the stock, but before we get to that discussion we'll also point out something else packed into the press release -- there's a research report in the works which will include revenue projections now that its Pocket Starships game is up and running. This could be the final piece of the puzzle, so to speak, for any would-be SPYR shareholders who are still trying to get a firm grip on exactly where this may all be going. See, the next few quarters are likely to look very, very different -- in a good way -- than the recent past has looked. We also think this is going to be an accurate revenue projection since it's largely coming from the game's developer, Spectacle Games. Who's going to have a better idea about what's in the cards for a mobile game than the people developing the game, right? We don't have a specific release date for this report, though it may not entirely matter. Sometimes the mere knowledge that encouraging research is on the way is enough to draw a crowd of bulls. Now, there's something else worth noting about the stock spinoff that wasn't even touched on in the press release... it has the potential to spark a short-covering rally. Although we don't always hash out all the details with you when we introduce a new trading idea, we always do a great deal of due diligence on the stocks we cover. One of the things we noticed about SPYR was an unusual degree of short interest in the stock... a large number of people who have bet against it by selling it, with plans to buy it back later at what they hope is a lower price. As of the end of February there were 463,000 shares of SPYR shorted. That's a heck of a lot, considering the average daily trading volume for the stock is only 274,000. And it's not like that short interest has been whittled away in the meantime. If anything, it may have grown. The inherent problem with selling a stock short is, the risk is theoretically infinite, and that can make some traders very desperate, very quickly. See, while the most you can lose when owning a stock is your initial investment (if a stock falls to $0.00), there's nothing to prevent a stock from going up and up indefinitely. At some point though, a short-seller has to buy those shares back - there is no other way to exit the trade. If the stock is rising and looks like it will continue to do so for a while, it's just a matter of when that trader comes to his/her senses and takes the loss. The irony is, buying that stock to cover a short position in it only exacerbates the bullish pressure on the equity in question. Great, but what's this got to do with SPYR? As part of the condition of receiving the spinoff shares, they have to be issued "to its shareholders of record as of a specific record date." This is where it gets tricky, but exciting. Two things are apt to happen with SPYR here. We see both of them as potentially (very) bullish. The first thing is, all those SPYR shares that have been out 'on loan' from regular shareholders to short-sellers are essentially going be recalled by their rightful owners. Those owners will move them out of their margin accounts -- where they're held in a brokerage firm's name so they can be lent to the short-sellers -- into cash accounts where they'll be in their rightful holder's name, specifically designating them as the "shareholder of record." This is the only way those owners can be eligible for the stock spinoff. Here's the rub for the short-sellers: If there are no shares left in margin accounts to borrow, it's practically impossible to short SPYR shares, and similarly impossible to even hold onto a short position. This could effectively force a mass-buyback to cover all those SPYR short trades as all the outstanding shares move from margin accounts to cash accounts. There's not a lot the shorts can do about it. The other thing that could happen here... well, it's actually the same thing, but even more problematic if a short-seller is a so-called naked short. A naked short position from a retail trader just means that trader has sold shares short without their brokerage firm specifically confirming there were shares available to borrow in the first place. No, it's not legal in many cases, but yes, it still happens quite a bit. These folks are particularly in trouble because the brokerage firm won't even be able act as an intermediary between a long-owner and a short-seller. The naked short seller's only option to cover their short trade is buying them in the open market. The brokerage isn't even going to go to the trouble of warning these traders what's about to happen, nor will they simply close out a trade to put those shares back in a specific cash (non-margin) account. They can't, because there is no designated SPYR shareholder linked to those specific shares even though there's supposed to be. Those short-sellers are very much on their own, and by the time the naked short traders figure it out, SPYR could be very, very expensive. Ironically, any waves of naked short-covering buying will only drive the price of the stock even higher. That's why it's called a short squeeze - the higher the stock goes, the more desperate those short-sellers are to get out. This isn't the intent of the stock spinoff. Like we said, SPYR's only aim here is to divide the business up into two separate and more focused units, both of which will be better investments on their own than they would be together. We just see the potential short squeeze as a little gravy, perhaps fanning the flames of the advance that was jump-started yesterday. The whole SPYR story just keeps getting better and better. Here's the press release. SPYR Enters Second Quarter Poised for Significant Growth Through Year-End Company Declares Special Dividend to Shareholders DENVER, March 21, 2017 /PRNewswire/ -- SPYR, INC. (SPYR), a holding company with wholly owned subsidiaries in both the mobile game & app development and publishing industry, and in the restaurant industry, today provides its shareholders with an update on further developments heading into Q2 2017. Pocket Starships In Q2, the Company will be engaging in a campaign to optimize user acquisition, which will correspond to revenue growth. Over the past several months, the SPYR team has worked closely with the development team at Spectacle Games to optimize key game play systems, based on analysis of player behavior and players' in-game activities. Now the path to optimizing user acquisition is clear and, as the development team is implementing these features, SPYR's marketing team will be ramping up efforts to bring this new content to consumers at an accelerated rate. Stock Dividend In January, SPYR announced its intent to divest itself from its restaurant division by spinning off the business, and issuing a stock dividend to its shareholders of record as of a specific record date. In the coming weeks, SPYR's Board of Directors will carry out the necessary corporate and regulatory requirements to implement the spin-off and stock dividend, including informing shareholders of the exact procedure to be followed in order to receive their stock dividend. After SPYR concludes the spin-off of the restaurant division, SPYR will file a registration statement with the Securities and Exchange Commission qualifying it as a separate publicly traded entity with a separate trading symbol. Today, SPYR announces that the record date to receive the stock dividend will be May 19, 2017, and the Company will be issuing a 100% (1 for 1) stock dividend to those who hold shares of SPYR on May 19, 2017. Example: If a shareholder owns 50,000 shares of SPYR on May 19, 2017, the shareholder will receive 50,000 shares in the newly spun-off publicly trading company. That shareholder will then own his/her original 50,000 shares of SPYR and 50,000 shares of the newly spun-off publicly traded company. Conversely, if a shareholder is short 50,000 shares of SPYR, the shareholder will need to locate the 50,000 "not yet issued" but registered shares in the newly spun-off company. Research Report / Revenue Projections SPYR will be releasing a research report, which will include revenue projections supplied by its development partner, Spectacle Games, before the end of the second quarter 2017. The research report will include an outline of the mobile gaming market and will highlight the significance of the adaptability of the platform that Pocket Starships has been built upon, as well as SPYR's entry into the competitive eSports arena. About SPYR SPYR, INC. is a holding company that through its wholly owned subsidiary SPYR APPS, LLC, is engaged in mobile application and game publishing and development. SPYR, INC. also owns and operates an "American Diner" theme restaurant located in the Philadelphia International Airport in Philadelphia, Pennsylvania called "Eat at Joe's®" through its other wholly-owned subsidiary, E.A.J.: PHL Airport Inc. The Company is currently exploring opportunities for additional acquisitions in these and other verticals, including mobile application and game development, in order to expand its holdings, to drive and increase revenue and to generate profits and build value for shareholders. Safe Harbor Statement: This release contains forward-looking statements that are based upon current expectations or beliefs, as well as a number of assumptions about future events. Although we believe that the expectations reflected in the forward-looking statements and the assumptions upon which they are based are reasonable, we can give no assurance or guarantee that such expectations and assumptions will prove to have been correct. Forward-looking statements are generally identifiable by the use of words like "may," "will," "should," "could," "expect," "anticipate," "estimate," "believe," "intend," or "project" or the negative of these words or other variations on these words or comparable terminology. The reader is cautioned not to put undue reliance on these forward-looking statements, as these statements are subject to numerous factors and uncertainties, including but not limited to: adverse economic conditions, competition, adverse federal, state and local government regulation, international governmental regulation, inadequate capital, inability to carry out research, development and commercialization plans, loss or retirement of key executives and other specific risks. To the extent that statements in this press release are not strictly historical, including statements as to revenue projections, business strategy, outlook, objectives, future milestones, plans, intentions, goals, future financial conditions, events conditioned on stockholder or other approval, or otherwise as to future events, such statements are forward-looking, and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The forward-looking statements contained in this release are subject to certain risks and uncertainties that could cause actual results to differ materially from the statements made. Readers are advised to review our filings with the Securities and Exchange Commission that can be accessed over the Internet at the SEC's website located at http://www.sec.gov, as well as SPYR's website located at http://www.spyr.com, and SPYR's community channel on Twitter located at https://twitter.com/spyrinc. Investor Relations Contacts: Marlin Molinaro Marmel Communications, LLC (828) 669-0616 mmolinarofc@aol.com Stanley Wunderlich Consulting for Strategic Growth 1 Ltd. Tel: 800-625-2236 ext. 7770 Email: info@cfsg1.com SOURCE SPYR, INC.