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Microcap & Penny Stocks : Globalstar Telecommunications Limited GSAT
GSAT 60.01+0.4%Jan 9 3:59 PM EST
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To: RobertSheldon who wrote (12922)5/17/2000 7:54:00 PM
From: Ira Player  Read Replies (1) of 29987
 
Gentleman and lady's involved in the short verses long debate and cat fight,

Who cares.....

I would like to throw the following observations into the ring:

1. GSTRF has already fallen from the lofty height of $53+ in the last 4+ months to the troubling level it now spasmodically holds.

2. Short interest appears to be at an all time high. (what we know about it anyway)

3. This thread is now host to a group of folks intent on espousing the short side.

From the above, I comment:

1. Now is not the time to short a company like GSTRF. It is trading at 20% of it's recent value and has a high short interest already.

2. High short interest enhances the volatility, due to covering when there is an "unexpected" rise.

3. Short positions are more sensitive to margin calls. A 50% margined long position must drop to 71.43% of it's purchase price before reaching 30%. A short position must only increase to 115.38% of it's sale price before the margin call is generated. (I'm looking at at the leveraged player here.)

When a company has been beaten down this far, in my opinion, it is far safer and profitable to play the volatility from the long side rather than the short, even if you believe (and I don't have an opinion) that the stock is headed for the graveyard.

Fight it out all you want about the fundamental issues regarding the long term viability of GSTRF.

Making money on this one in the near term involves buying when the stock reaches a local low (next one near or slightly below $9) and sell the short enhanced panic highs.

Just an opinion,

Ira
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