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Technology Stocks : MCDT
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To: Topannuity who wrote (19)4/28/2001 1:24:18 PM
From: kirkpul  Read Replies (1) of 145
 
MCDT longs: now is the time to switch your MCTD for MCDTA.

A price bounce short squeeze in MCDT is impossible now (see below) and the spread is over 5 points.

So sell MCDT while buying the more valuable (but cheaper) MCDTA and profit by the difference.

Don't wait too long or the opportunity will be reduced or lost. MCDT and MCDTA are to be combined around Nov. 1, 2002.

Topannuity, you asked about whether you should short MCDT while buying MCDTA. Lots of arbs are trying to do that, but can't get the MCDT shares to short. As soon as any MCDT short covers or is squeezed out, there is an eager new MCDT/A arb to reshort the MCDT.

That is why there will be no price bounce short squeeze effect from the large MCDT short position as long as the spread continues to be large enough to attract arbs.

That is why MCDT holders should sell their MCDT and buy MCDTA.

And that is why new McDATA investors should buy MCDTA rather than MCDT as long as the superior voting rights MCDTA sells at a lower price than the inferior MCDT.
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