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Technology Stocks : HNC Software (HNCS)

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To: Tom Hua who wrote (149)11/15/1999 3:43:00 PM
From: Red Dragon  Read Replies (1) of 226
 
I'm not sure why there is an interest in shorting HNC.

Obviously, it would depend on how well Retek performs. However, we all know how hot B2B stocks are right now. If Retek explodes like other B2B plays (Ariba, Commerce One, etc), then HNC will get dragged upwards and track Retek. Once the shares are spun off, then HNC will drop.

Until the spinoff date, however, HNC will track Retek upwards. Arbitrage players will not allow HNC to fall very far prior to spinoff, as it would be a cheap and easy way to acquire discounted Retek shares.

Perhaps I'm missing something in my logic, but it seems awfully risky to short HNC right now...
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