Its the DISH money machine starting up again. The rough outline is this. If you buy about 60 days before a launch and sell about a week before, you stand to gain about 8-9 points. But don't wait until the launch, or DISH will issue a release about another debt offering or a stock offering that will beat the stock down again.
Lets see: they are launching in about a month, and one month ago the stock was at 15+/-. It is already 21 1/2. Sounds like we're right on track. Of course, when you buy at 15 and it goes to 24 you'll be tempted to hold it, but don't.
Don't get me wrong. I'm not being critical. To the contrary, it makes perfect sense for a capital-intensive company like Echostar to raise money when it can get the best deal. Why issue shares at 15 when you can wait and know it will be 25?
Best of all, it is the closest thing to a sure bet in the market. Don't take my word for it. Study my back posts on this thread in the months leading up to the other launches. Print out a copy of the chart ( i would recommend investools.com Make sure you uncheck "logarithmic scale" - it tends to hide the pattern somewhat) going back to say October 1995. Now, look at the launch dates: December 28, 1995; September 1996; October 1997. What you'll notice is a pattern. The launch of Echo III is the most informative, because after the launch, more shares and some convertible debt were issued. Options were granted. The net effect was to reduce the stock price. And, unlike my expectations at that time, the stock peaked the week BEFORE the launch. That's because knowledgeble investors retreated in advance of the dilution caused by issuing extra shares.
The launch is like El Nino: it is an outside event that acts as a predictor of price movements.
Finally, I'm sure that I (and those who follow this thread) am not the only one paying close attention here. Expect that others aware of this phenomenon will also be looking to cash in. This means more money buying now and selling in a month or so. Of course, many will be moving large blocks, and they will look to get out a little early, so don't hold too long...
Good Luck!
Regards,
NOEL |
