I don't believe that it is hesitancy. The launch should be successful, although there is always a little risk. However, I believe that knowledgable investors are expecting the company to seek further equity financing on the heels of a successful launch. In my opinion, and I have been wrong before, the stock has already reached a high and will slide back down over the coming weeks and months.
Take a look at the charts. For Echo I, the stock got a nice pop from the launch. Echo II, a respectable bump, but less than Echo I. With Echo III, the stock hit a high before the launch, and then actually came down in the days immediately leading up to the launch. Right after the launch, the company did an equity offering to gain more capital, and the resulting dilution pushed the stock back down. With Echo IV, I think that knowledgable investors are expecting more of the same and are getting out now, content with the 50% gain that they received since Feb.
As I have said before on this thread, I think this is a great company with a great product. And I think they are going about raising funding the right way. But I think this is a stock that you buy and sell. If you look at the entire chart since the company went public in 1995, the stock hits a low in the months before a launch and then spikes upward. Sell with that initial spike and rebuy when the stock is down.
To my mind, the best type of stock is not one that keeps going up and up, because then you can never take a profit. The best kind is one that goes UP and DOWN predictably. That what DISH is.
As always, I AM NOT A BROKER. This represents my own opinion, and you should research the stock carefully before you buy or sell.
Regards,
NOEL |
