Mark, I think that one should keep in mind the time bomb feature of the floorless event. I am in another stock that has a remote explosion like that in June of 2001, and right now, it does not bother me, but when that ignition time comes to play, I would worry.
As an example, look at VLNC, it had a floorless feature triggering on July $27, and look at the stock action in the last six weeks, leading into that and after that. That is the kind of thing you should worry about. I agree with you that if ASTN performs and indeed launches its product successfully, this would be mute. The worry of course is that the "plan" assumed over al trading in the NYSE at a billion shares or so daily (and their volume, presumably would be a function of general activity), but recently the NYSE volume has declined to 600 MM shares daily, and I cannot but wonder if such slower volume is factored is their own "breakeven" number. I was expecting the stock to collapse again toward the $6 area before I reenter ASTN (since I think they have a valid business purpose, despite the fact that I still have questions as to their ability to get the "margins" we discussed at the time), but so far it has held pretty well. This new issue may put some ceiling on the price of the stock (typically about 20% to 50% above the conversion ceiling) due to hedging activities, so I will not reenter unless greater discounts are present.
If someone were to ask my advice on this from the little I know, I would say that profits should be taken on rallies above about $12-13/share, simply because the weight of hedging activities will prevent major runs. Of course, stellar performance in their business could negate this "opinion" completely, but we won't really know much about that performance for a good quarter or more.
Good luck out there.
Zeev |
