KEEP ON CRUSHING..............
by: SmartWire (M/Chicago, IL) 21709 of 21709The "Microsoft Crush" is a long term arbitrage that more and more of the professionals on the street should be legging into these days.
George Soros.....are you listening??
Strategy: in Equal money % weights
Sell Microsoft
Buy Novell
or
To which you might add.....
Buy the Open-Systems Server-centric, cross-platform Java-supported bundle: i.e. Novell, Red Hat, Caldera, Oracle, Sun, AOL, Lucent, Nortell, etc.
If you think Cisco is going to make their bed with Microsoft I'd suggest balancing 25% of your short position with Cisco.
You might want to weight some of the high and mighty e-commerce internet stocks in the short mix.
Microsoft Crush Status:
Posted November 6th:
MSFT: Close $109.375
NOVL: Close $14.625
Now
MSFT 152 7/8 + 43.5%
Novell 20 1/4 + 38.4%
Just earlier this morning the spread was dead even.
FYI, here's what I posted this last fall.
Subject: KEEP ON CRUSHING......
Date: 12/10/98 12:09 AM Central Standard Time
From: FKSmart
Message-id: <19981210010946.03165.00000418@ng-fa2.aol.com>
>>Subject: Microsoft CRUSH.......
Date: Tue, Nov 17, 1998 10:41 EST
From: FKSmart
Message-id: <19981117104133.13146.00003105@ng03.aol.com>
>>Short MSFT and buy Novell. Now that'll be a nice spread to follow from here on out. Does someone want to volunteer to watch this baby. It will give us a good index mark for following this saga going forward.>>
Posted November 6th:
MSFT: Close $109.375
NOVL: Close $14.625
Now:
MSFT: $110 +.00571%
NOVL: $15 +2.56%
2.56/.00571 = 448 times better....Wow!!
Let's call this the "Microsoft Crush" spread - ie. ....
1) Selling short the Fat PC and local server databases.
2) Go Long: Bandwidth, Application Servers Running Smart Apps, Directories, Java, JINI In Internet Wave 2.
Novell's NDS will open up Windows NT to the power of Wave 2. Wave 2 power will be the undoing of the windows monopoly.
The Justice Dept. should watch the Microsoft CRUSH spread...... Their efforts have put more teeth into Microsoft's competitors which will accelerate this shift toward the Internet.
Stay tuned.... >>
"KEEP ON CRUSHING" UPDATE:
MSFT $133 5/8 UP 24 1/4 + 22.17%
NOVL $18 UP 3 3/8 + 23.07
Those who also sold out of the money calls and puts on Novell did very well on this deal.
The BIGGIE fund managers are gradually climbing on board this spread with an over weighting toward Novell. Great way to work out of your oversized and overleveraged Microsoft positions.
Ida5683 |
