Hey, Jon - been thinking along the same lines as you it seems, and here's a couple of conclusions that have occurred to me.
First, Q* has had some good news, but you need to know the lay of the land to interpret most of it. Hence, the market is going to hammer Q* in concert with wireless until one of the holy grails arrives. pcstel said as much when he advised dancing on the sidelines. There's some pretty powerful market forces at work here and for the time being, Q* will suffer with the rest.
I am surprised that the latest announcement out of China hasn't caused more of a stir. In fact, according to my earlier theory that should have been good for another assault on the mid 80 mark. Whether the over all market simply overwhelmed it, or wallstreet is simply fed up with "announcements" and will no longer react until some money changes hands I don't know. At any rate, from my perspective, score another one for pcstel.
Another larger picture morph that seems painfully obvious, but hasn't IMHO received enough attention, is the spoken macro position of IJ. A long time ago, he told us he didn't care what flavor - just roll it. Since then the FUDD, or the news, or the reality - take your pick - surrounding w-CDMA has morphed from "Q* won't get paid" to "it's going to be delayed." IJ has consistently debunked the former. Today, however, he endorsed the latter. So ... if IJ told us it was important to roll it, and he now acknowledges it is delayed, should we not take heed? Or, more sinisterly for the stock price, can we anticipate downward guidance from the Q*?
I understand China can cure a lot of revenue ills. I still think a definitive contract evidencing money changing hands will push this stock back to triple digits in a hurry. But that's probably months away. And I don't think we can ignore the fact that as we write, IJ is in Europe promoting 1Xev. Face it, the GSM world is huge. The projected revenues from w-CDMA are staggering. They've been delayed. So that too must be huge, hugely negative. At least it is important enough for IJ to tour Europe promoting his wares. I think there's significance to that. Short term, I don't like the implications. Longer term, well for those that root for a CDMA 2000 win it is a positive.
In short, tech is taking a beating, and wireless is getting kicked in part just because it's tech. But in addition, there is increasing evidence that the optimism over 3G is being dampened substantially as well. I just don't think Q* can shrug off that double whammy - either on wallstreet or at the cash register. Still, 1Xev in Europe is a biggie, China is huge, a NOK contract is huge - any of those could reverse Q*'s perceived fortunes in a heart beat. Probably Diamond has it right. Keep that core position so you don't get caught flat footed when the inevitable arrives, and trade the rest when you're comfortable with the short term view. To paraphrase pcstel, for the near term use only trading money to dance with the Q*, and keep the dances short.
Pierre |
