Charles: One possible reason for "loading" the Sept Q might be to entice institutions to buy the stock right now. I saw a lot of blocks of size 10,000 bought at 7 7/8, 8, 8 1/64, etc. Small investors have been huge owners of this stock, since it was a favorite of bottom fishers down at $2 and $3. My understanding is that a lot of institutions don't like to buy stock below $10 if the stock is going to stay down there. Since it went above $10 and then pulled back, this is a good entry point for institutions provided the company can meet expectations in the Sept Q. If they don't meet expectations in the Sept Q, I would think they would get smashed by tax-loss selling after Oct 22 when they report and institutions would not want to buy into a stock with that possibility. If they got smashed in Oct, the stock would probably drop all the way back to the 200-day MA back down around 5+(currently, it is about 4 3/4).
On the other hand, if they can "load" the earnings for the Sept Q, they also then have the possibility of Chartered Semi making its IPO near the end of the year to give the stock another boost toward the end of the year to further entice institutions to buy now.
Clearly, the company is catering to institutional buyers if they are restricting the CC to institutions and leaving small investors guessing as to what is going on behind the closed doors.
This is all speculation, but it might explain why they are willing to take a hit now in order to get a strong Sept Q. I hope their semiconductor business will improve this quarter as they seem to suggest in their quarterly report.
Harlan |
