Roger's 1997 Short Picks Message Board

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Strategies & Market Trends : Roger's 1997 Short Picks

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To: Bill Wexler who wrote (7979)	12/8/1997 1:35:00 PM
From: Eric Klein	of 9285

CVC - My guess is that there is speculation that if cable modems become popular then all the cable companies will suddenly become much more valuable. Then CVC would be a takeover candidate. I don't really subscribe to this view. For one thing, the cable infrastructure is not suitable for two way digital packet transmissions. It will take a whale of a lot of new investment to upgrade their infrastructure, and of course CVC is heavily in debt already. It may not be easy for them to borrow the type of money that such an upgrade would require. They just bought Radio City Music Hall. Excuse me if I'm wrong, but why would a company that's so much in debt hang an albatross like that around their neck? What kind of a market is it in which a company that's losing money hand over fist like CVC keeps going up because in the future it could become a takeover candidate if a sequence of improbable events occur. But of course in this market illogic is king. A logical argument that CVC is overpriced is a strong indicator that the stock price will go up.

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