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Technology Stocks : CATP-The stock is taking off
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To: geoffrey Wren who wrote (672)6/27/1999 7:09:00 PM
From: Bret Masterson   of 782
 
Economist press indeed positive. Buyout rumors seem to be what's driving the stock now though. A couple points seem pretty apparent to me:

(1) There have been so many buyout rumors that it is obvious that CAPT is talking to many players.

(2) Professional service organizations like CATP are always more prone to be "leaky" in terms of information flow, compared to more typical companies. Because of this, every serious discussion with a potential suitor gets posted a rumor board somewhere. I've heard/read rumors about EDS and IBM that both seemed plausible enough.

(3) CAPT definitely trying to quickly right a troubled ship
a. Lots of negative flack from current and former CAPT
employees about current management, coupled with
anecdotes of significant numbers of personnel thinking
of leaving.
b. Personnel defections will indeed hobble the company if the
can not get their stock price up fast. Way too many
start-ups needing the kind of talent CAPT has, if if all
CAPT employees' stock options are out of the money, there is
no reason or leverage to hold them in place.
c. Moves to add add new, seasoned operating talent to
management as well as buyout rumors seem to indicate that
CAPT understands this too, and is deep into the process of
selecting the best strategy and/or buyout partner to help
right the ship.

(4) A very speculative sort of logic would dictate that things may turn around soon for the CAPT stock price. (E.G. CAPT will either accept a buyout offer in the very near future, or CAPT will re-establish earnings momentum, and hence increase the stock price. Argument goes something like the following:
a. Way too many rumors to think that CAPT hasn't already gotten
some sort of an rough or indicated offer.
b. If next quarter's earnings are expected to again hammer
the stock price, CAPT has strong incentive to accept one
of the offers. Offer might not be as high as CAPT
wanted, but there really would not be much of a choice.
c. Other possibility is that CAPTs financial situations is
indeed turning around, which would lead management to
delay or perhaps postpone indefinitely any buyout.
d. The beauty of it is that either way we should get a strong
movement up.

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