RE: ALLR
excerpt from Okumus on CNNfn yesterday...
CALLER: Hi, congratulations on your great returns in such a difficult
market.
OKUMUS: Thanks.
CALLER: My question is, what are your two favorite stocks for the
long-term, like two- to five-years, in technology?
OKUMUS: OK. Well given the decline in technology, I think we're finding
right now incredible opportunities at our hands. I mean, when you see
Technology Index Nasdaq is down 50 percent from the peak, some of the
stocks out there are down 80, 90, 95 percent, and these are not some
fly-by-night operations; these are some good businesses. They've been
around for a while and they're executing their plan. Even though they
disappointed in the last quarter or so, some of the stocks are actually
trading at their net cash. So you're buying basically their business - for
free.
One example of that will be a software company called Allaire . They help
software services to help businesses to build their web sites. And, for
example, they're about 30 million shares outstanding, and they got $4.50 a
share sitting in their balance sheet in cash, and no debts. And the stock
is selling at 5 5/8 right now. So you're getting the whole company for $29
million enterprise value. Stock is down from 95 to 5, so it's down about
almost 95 percent.
THIERRY: That's a haircut!
OKUMUS: Yes. And insiders of this company, they're exercising option and
hanging onto the stock. So they are actually going to pay taxes on it. When
you see the tech companies, when they exercise stock and hang onto the
stock, that means only one thing: that means that they think stock fell
down as much as it is going to fall, and they are paying taxes on the low
stock price. |
