Is it worth holding a short position when the share price drops below $5?

Question

I have a short position in CROX and the price has now dropped below $5, the price where most brokerages prohibit new short positions. Is it likely the price will drop much further if no one can add to their short positions to drive this stock lower? This is not a technical question really, I'm just wondering what could drive the price any lower aside from no one wanting to own the stock?

Answer 1

I would think that the change of the stock significantly further is pretty low and I personally would cash out.  With such a low share price, it could be tempting for another company to buy it out and you'd hate to be blindsided by an unanticipated merger that would drive the stock up precipitously.  Just ask how shorties of ROH are feeling right now.