John,
In my opinion, PITC did not move up because Nextel got the better end of this deal. They are doing a stock swap where if Nextel goes up before closing, PITC will get fewer shares, but if Nextel goes down, PITC will get the same number of shares. Nextel moved down only slightly because everybody expects them to buy up regional owners of SMR, and this time they didn't even use cash. That is the strategy and it is nothing new.
How long is long? Look at the chart. It is the very definition of volatility. You can double or triple your money in a matter of months with this one, but the reverse is true as well. There will be no earnings until 1998, so expect volatility to continue. I would say poor audio quality two years ago has NO affect on the stock price. Wall street has a short memory! What will move this stock is the ability to effectively roll out PowerFone on schedule, problem free, in the months ahead, before others gain significant share. I expected a bigger sell off in light of AT&T's announcement, but the fact that it has not happened tells me that the smart money is still with Nextel, and AT&T must prove itself first. Nextel has only rolled out in Boston and Chicago so far; AT&T has announced availability in most major markets already. There will definitely be more competition from Sprint and others. On Oct 1, Nextel wrapped up all of the financing it will need to make it through the product roll out and into 1998. The market will be big enough for several players, but gaining market share will be key. Good luck.
IOMEGA: too risky, too unpredictable, mass hysteria driven, don't ask for advice here. |
