We will disagree then, advalorem.
You compare ACVC to Cendent, Oxford Health, McKesson.
I am comparing ACVC to NEON, LU, MSTR.....
Can I name a stock that has lost management credibility? Yes, look at MSTR! The Yahoo board for MSTR has had over 4500 postings in the last FIVE days. Look at those from early in the week. Doom and Gloom!! Restated earnings! Predictions for $20, $10, single digits, bankruptcy. Accusations of fraud against the CEO. Predictions of long jail time. Class-action suits by the bucketful.
Shareholder PAIN? Yes, worse than ACVC's! From a $333 High to a $63 Low in a week! 80+%! Message board expectations Tuesday of 95%+ loss! THAT'S PAIN!!
And what happened after Tuesday's $63 Low? Friday's $142 High! The devout Short who entered at the worst moment has suffered greater pain than any Long of MSTR has ever endured.
Now look at a stock in ACVC's industry: General Magic (GMGC) whose voice systems power Cadillac's 'OnStar' option. To understate the case, the earnings were a significant disappointment. "The Company incurred a net loss of $47.6 million, or $1.56 per diluted share, for the twelve months ended December 31, 1999, compared to a net loss of $38.9 million, or $2.09 per diluted share, for the twelve months ended December 31, 1998." This $13 stock, within two days, powered itself to a $18 3/4 High. (Now it's back at $13, but you can't point to any causative factor other than its normal trading range.)
Where do we go from here? It's apparent that these hot stocks are not driven by earnings reports (rightly or wrongly). They are driven by future expectations. Investors expect that the Windows 2000 deal is a biggie. Some investors expect ACVC to turn into a buyout play. You can see by its strength after the fall that ACVC is not a Cendant or a McKesson. You are modeling ACVC after the wrong group of companies.
Listen to the strength. ACVC's worst days are behind it. IMHO, of course. |
