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Biotech / Medical : Laser Vision Centers, Inc. (NASDAQ: LVCI)
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To: Angler who wrote (257)8/18/1999 12:03:00 PM
From: W Shakespeare  Read Replies (2) of 413
 
This is the most insidious kind of sudden price drop: no news has come forth to explain it. In place of real news is an entire batch of rumors. I will comment on each.

1.) <<There is a lawsuit against one of the players because of damage incurred in a procedure. >> There is always that possibility, but such an lawsuit would be covered by liability insurance.

2.) <<There is a new Canadian competitor who is going to come to the USA and charge sharply lower prices setting off a price war.>> Since the industry is still in its infancy, such a move could hurt some individual laser centers (in certain markets), but overall, I think its impact would not be that serious. In addition, the providers such as VISX and BEAM are also down today which makes no sense in such a scenario (they would benefit from the increase in procedures).

3.) <<A renewed interest in the internet sector is draining all the money from the laser vision stocks.>> I fail to understand the logic behind this one.

4.) <<A new initial offering for a laser stock is going badly today and is pulling down the entire sector.>> I don't see how such an event could pull down some stocks in the sector by 25%. In any event, it would only cause a temporary drop.

I think that the real reason the stocks are going down is this: panic selling on no news. It will be hard for the vision stocks to recover until the individual companies and the analysts following them make statements saying, "Everything is O.K." Until then, the rumors, however stupid or unlikely, will depress the stocks. I am holding firm and will ride out this latest drop.

P.S. - Expect such volatility to continue. This is a high priced, high growth sector that will continue to correct in precipitous, but short-lived drops.
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