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Technology Stocks : Novell (NOVL) dirt cheap, good buy?
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To: EPS who wrote (28232)9/23/1999 8:15:00 PM
From: Paul Fiondella  Read Replies (1) of 42771
 
Selling puts

I don't understand much of this Ballmer discussion. Selling puts is a typical strategy on the part of a corporation to issues options to its management/employees and then buy back the stock from the open market to neutralize the effect and keep the total number of shares somewhat even.

Of course who gets to buy these puts and at what price is the substance of Smart's comments. These are big deals. Fred certainly has abetter take on them than I do. I would not call his comments a conspiracy but rather an attempt to explain how MSFT uses this selling of puts to support its stock.

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On the subject of NOVL, we ended up at 20. Enormous trades took place on and after the close mirroring the Nasdaq slide. From 20 1/2 to 20 in 30 minutes.

The pattern is there for anybody to see. Someone is buying a ton of calls --- today some 2715 OCt 20 calls were bought between 1 1/4 and 1 15/16ths. These guys are buying the calls and dumping the stock. NOVL is a stock that cna be moved up or down with very little volume. Today was a textbook case. Look at he chart everyone and learn soemthing about your stock!

They did the call selling at 22.5 and 25 and they have been doing it repeatedly. You could almost read what is going to happen from what they do. They are driving the stock down. at some point of course they will try it one more time and fail, but so far they have Greenspan on their side.
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