Rich, here is a little speculation"ripe for the time, and the stocks have not really moved up a lot. It is my contention that by next April, SCON will have seen prices higher than $20, and where SCON goes so does CDTS (I bought both of these yesterday during my large deployment).
The scenario, is a similar one to the one that allowed some nice harvesting in MVIS first (was it two years ago?) and then in MU. It is my opinion that the rise will be "executed to force a conversion of the convertible debt that SCON took on. Here, however, there is another twist, since the conversion is a future partial floorless (floor at $10.5), but, the market was such that the debenture holders never had a chance to lay out their hedge above the strike price (just around $17). The partial floorlessness does become effective until the third quarter this year. During a bear market, the poor converts simply did not have a chance to execute the "plan", but we are moving into a strong bull move that could last (with interruptions) till spring of next year, IMHO. Thus, it will make sense to get the price well above the $17 official strike, and then, the converts will lay their hedge. Both in the MVIS and MU cases, the actual top was well above the target tops at that time, that is why I think that SCON could reach prices in excess of $20. That may actually happen much faster then "by next spring", but I don't see yet the seeds of that activity in the stocks action. CDTS will simply be carried with SCON IMHO and probably will have a 20% to 40% discount. Still a worthwhile bet, IMTO.
Both of these companies are really development stage companies hoping to build a future on the deployment of wireless communication systems, and the fact that SAWS and TQNT merge will pose more competitive problems for the two, so be careful and use caution and only "speculative" money for these plays.
Zeev
Zeev |
