I covered my short position.

Ackman's valuation comments are probably valid, but valuation alone is not enough for me to short a stock.

Realty Income's balance sheet is strong. Their occupancy remains high.

I look for material items being hidden by management when shorting a name. The enhanced disclosure that was given yesterday, and the positive response by analysts was enough for me to realize that management (while possibly misguided) is not fundamentally hiding the nature of the business as it pertains to the tenants and credit quality of tenants.

I also a not overly convinced that retail investors will dump the stock if the distribution is cut. I think that they are more likely to stick it out than hot money hedge funds will be.

I am also troubled by the trend that I am seeing in Ackman's approach to putting information into the market place. His play book seems to be:

1)Get Barrons to publish an article that advances his position
2)Give a presentation (that seems to be targeted at retail investors) at a large investor conference
3)Leak the presentation out onto the internet

This has happened at least 3 times now -- General Growth Properties, Realty Income and Corrections Corp of America. This pumping strategy may work, but in my opinion it shatters the credibility of both Barrons and Ackman's analysis.

Good luck to all involved in the name. If the stock does trade down to the $14 level suggested by Ackman's valuation model then I will probably look to be a buyer.

Until then -- valuation alone is not enough for me to short the stock. If management is not hiding material facts then I see substantially less reason for the stock to blow up.