S3 (Multimedia semi's place 2be) Message Board

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Technology Stocks : S3 (Multimedia semi's place 2be)

SIII 0.0001000

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May 12 5:00 PM EST

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To: chuckj who wrote (8021)	3/2/1997 12:23:00 AM
From: Randy McWilliams	of 9477

Chuckj: you state that "shorting is done on technical analysis and not based on fundamentals of the company". Without question much shorting is based on fundamentals. For example, Stephans of Robertson Stephans recently stated that their hedge fund looks specifically for companies that have poor fundamentals and of course where the stock price does not reflect this. He mentioned increased inventories that may become a problem within one or two quarters as one thing they look for when evaluating whether to short a stock or not. Increased shorting of a company may or may not reflect underlying fundamental problems with a company. CUBE has a huge amount of shorting now because some shorters believe that they are losing VCD market share to ESST and the DVD "revolution" is being so delayed that their revenues from DVD will be less than anticipated. This is a fundamental reason behind their shorting. As a CUBE long investor I believe they are fundamentally wrong and their shorts will be squeezed at some point.

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