WR's Momentum Trades Message Board

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Strategies & Market Trends : WR's Momentum Trades

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To: Lola who wrote (9713)	3/19/2001 8:44:32 AM
From: ChrisJP	Read Replies (2) of 11130

Hi Lola and Wayne, I got an e-mail back from my MSFT source ... He basically said that if people were getting nailed by exercising options and then having their stock tank, he hasn't heard about. Oh well, didn't hurt to ask. A high school buddy of mine just flew into town from Austin, Tx, for a convention. He provides actuarial advice for pension fund managers. I mentioned the options situation and he has heard it happening ... The CFO of DELL lives in his neighborhood. But he doesn't think its such a big deal. But then again, DELL employees have had several years to cash in, and like MSFT, the stock is 50% off its highs. The way he looks at it is many DELL employees have made a bundle; this year a few of them get to give some of it back. MSFT is probably the same way. I think maybe its the companies that came from nowhere in late 1998 through March 2000 where the exposure is the greatest. Use PMCS as an example: Up from 15ish in late 1998 to over 200 in 2000, now at 32. There was no time for anyone to build any wealth over time from their options. And you can see how easy it would be to exercise your options but not sell the stock. Hard to believe these stocks have collapsed so fast. We are now finally finding out how much of the tech boom operated on "funny money" (i.e. inflated stock and borrowed money instead of cash or tangible assets). Depending on how extensive the practice was, the implications are not good. Can't wait for CSCO's next quarterly report. Of course, they should never have 20-bagged in the first place. But we'll have to leave that witch hunt for another day. Ummmmm ...... is SI officially dead and no one bothered to tell me ? Chris

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