Caution: When handling a short bet against TASER International (NYSE: TASR), you'd best wear rubber gloves.

This morning, the little stun-gun-maker-that-couldn't (earn a respectable profit if it tried) shocked the shorts who bet against it, announcing five significant sales contracts, all of which are expected to ship before the year is out, and thus contribute to fourth-quarter revenues and profits. In total, TASER announced the sale of 3,110 advanced M26 stun guns, 1,404 X26s, 712 CAM units, and 66,384 cartridges for the guns.

By my calculations, that comes to roughly $6.8 million in revenues at retail prices, though prices always differ on bulk orders. If you apply TASER's 2.6 sales multiple to that number, you'll find the new sales should be worth about $17.7 million in market cap for the company. So the question arises: Why is the stock up $39 million in market cap?

The AC/DC of sales trends
You can attribute TASER's outsized share price gain in part to the closing of short bets against the stock, as investors scramble to exercise damage control on their portfolios. You see, at last report, TASER had been expected to post a 30% decline in sales for Q4. Today's announcement suggests the actual decline could be more on the order of 10% -- $31 million in Q4 revenues, give or take.

Make no mistake, that would still be worse than what more traditional weapons manufacturers Sturm, Ruger (NYSE: RGR) and Smith & Wesson (Nasdaq: SWHC) are expected to report this quarter, but a heckuvalot better than most investors had feared. To this extent, TASER's stock price surge seems warranted ... except for one thing.

One very important thing
In the past year, TASER has managed to earn all of 0.18% profit margins on its sales. Therefore, $6.8 million in extra sales works out to all of about $12,240 in extra profit for TASER this quarter. So accuse me of being a glass-half-empty Fool if you wish, but to me, giving TASER a $39 million market cap bump for an extra 12 grand profit seems a bit generous. Or, to be extra generous, applying the company's historically best profit margins to the sale, TASER could see an extra million added to its bottom line.

Any way you slice it, this run-up looks a bit overcooked.

On the other hand, if you were looking for a gold-plated opportunity to get out of the stock on an overreaction to irrelevant news, then congrats. Mr. Market just handed it to you on a silver platter.