Disk Drive Sector Discussion Forum Message Board

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Technology Stocks : Disk Drive Sector Discussion Forum

WDC 157.11

-5.4%

3:59 PM EST

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To: Mark Adams who wrote (7688)	1/4/2000 3:54:00 PM
From: Sarmad Y. Hermiz	Read Replies (2) of 9256

>>WDC another company with 10% of the float short. My guess is shorts taking profits. This company looks especially weak, with institutional selling hitting 30% per the Yahoo profile, and a negative book value. My guess is they have another quarter or two barring additional asset sales or private placements. Should they announce a violation of existing financing terms, look for the stock to drop below $1 instantly. Note, I'm long WDC currently- but fully aware that this may end badly. << Mark, I had to reproduce your whole post because each point is important. 1- short. Yes there was 10 million shares short from a month ago. If the buying this year is due to short cover, then yesterday and today would totally satisfy that. So if it goes up again tomorrow, we'll know it is fresh buying. 2- Institutions. There is no one in the market more moronic than institutions. They simply try to create and flow with momentum. The best time to buy anything is when it is under-owned by institutions. 3- Financial position. Yes WDC is in a woeful state. In the past 3 months they private-placed 4 million shares at $3.6 per share. You might think some of those people should be selling now (at 30% profit in a few days). Yet that easy float is not pressuring the stock. Lst time I looked, WDC had a few hundred million in cash. I don't know whether they burned it by now or not. My guess is their revenue has been strong in the past quarter, so maybe their financial state is less bad. The key will be whether they file another private placement stock sale this month. If they can keep from doing that, I think they're safe for a while. One final note. Grant that WDC is a special case, why is HDD holding firm today in the face of the biggest Tech drop in history ? My guess is someone is accumulating disk drive stocks. And they are buying large quantities while they are still cheap. -Sarmad

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