Sharper Image Corporation (NDAQ:SHRP) shares dropped after the company posted wider losses for the third quarter, hurt by a 35 percent drop in sales. The specialty retailer reported a net loss of $1.50 per share compared to analyst estimates of a $1.31 per share loss on sales that actually beat Wall Street expectations of $67.4 million. Shareholders are hoping that one new development, however, will change the trend.

The Clinton Group caught shareholder attention when they disclosed an increased stake, from 157,000 shares to 1.09 million shares, and now controls approximately 7.2% of Sharper Image. The activist hedge fund did not make any specific comments regarding their intentions, but many shareholders are anticipating some kind of action in the near future given the hedge fund's reputation on Wall Street.

Sharper Image still faces an uphill battle, however, with the stock being down 64% so far this year and 82% during the last five years. Moreover, with 31% of its shares shorted, there is a lot of interest in keeping the stock down. However, any significant changes could also force a short squeeze and jump shares of the company in the short-term. Combined, these factors make SHRP a stock worth watching!

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