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When I first started shorting stocks in the late 90s, a well-timed press release would frequently send a microcap stock into a dizzying ascent.

For at least one stock — Hauppage (Nasdaq:HAUP) — those heady days have returned.

All it took was one press release mentioning those four letters that send tech hearts aflutter: iPad. The big news, according to the release, was that:

[Hauppage's] WinTV-HVR TV tuner boards for PCs can now stream live TV over the Internet to the iPad, iPhone andiPod touch and any Apple Macintosh computer which supports a Safari web browser.

And with that single press release, the relatively sleepy stock tripled Thursday on several million shares volume, and spiked further Friday with a whopping 29.2 million shares traded. Keep in mind the float is just under 8M, so every share traded, on average, more than 3.5 times today.

As backers will argue, Hauppage was well-primed for a spike. Only a few days ago, it was trading at around its cash balance. In other words, the market placed no value on HAUP's ongoing operations even though the company had a steady revenue base, a decent lineup of digital TV tuner products and software, and wasn't losing that much money. It didn't surprise me that a positive news item boosted HAUP shares, but the magnitude of this move was startling.

The most bizarre part of the story though, is that the so-called big news is not news at all. There have long been video solutions for the iPhone and iPad, including SlingPlayer's popular iPhone app (soon to come out in a custom iPad version) and the EyeTV iPhone/iPad app from Hauppage rival Elgato.

The SlingBox app seems to be more powerful and easy-to-use than Hauppage's WinTV software, which works only with one lineup of its tuner boards. SlingPlayer Mobile, when coupled with a SlingBox, works with any cable, satellite, DVD, etc. PC TV tuner boards are notoriously difficult to setup, requiring extensive tweaks and channel programming. SlingPlayer requires none. EyeTV also looks like a better option. And if you don't like either of those apps but want to extend your HTPC to your iPad, why not wait a month for the Boxee app to hit the iTunes Store?

The point is there are plenty of options now, and more are on the way. This software is an incremental positive factor for Hauppage, but is not revolutionary.

Win-TV 7 is certainly not worth the attention that mo-mo traders have showered upon Hauppage, even if every person that owned both a Hauppage tuner and an iPad or iPhone went out and bought it tomorrow. That's why I shorted HAUP into the Friday's close (at an average price of $3.93). Sooner or later, the mo-mo traders will find another hyped stock to chase. When they do, I expect that Hauppage will lose half of its value.

Disclosure: Short HAUP.

Source: Shorted Hauppage Digital on iPad Super-Spike