Thanks for the clarification. As to whether or not nonpublicly held information is used to trade a particular stock, illegaly, I would say that it happens all the time. Hypothetical example, maybe the CEO notes to his wife that their company, lets say, AALR, just finished a deal to be bought by Gateway. Hey, afterall, the Ceo is pumped. He doesnt trade on the info. But the wife, excitedly so, tells her friend who tells another and so on and so forth. This would be a relatively innocent violation. The rude and unforgiveable scenario is where the underwriter or firm handling the sale leaks the word. Oh yeah, did anyone notice AAL was up 2 and change yesterday and a deal was announced with Gtw after the close. Geez, I wonder if anyone knew.
As far as S3 is concerned, the $13 price was a nice increase over the $9 it was a few weeks ago. I dont think that anyone was blabbing about s3 specifically. I think that UBSS did their research, have some contacts with chip buyers and got a report that graphic 2d chips were under pricing pressure. Good reporting. Whether it proves that getting out at 12 was a good move or not, different story. Time will tell.
How exactly this translates into s3 earnings for the year, its a tough call. I have always felt that company has provided blunt, as in crystal clear, guidance. They tell it like it is which has always been tough for us who want to see a good spin ona bad situation. Unfortunately, that is not how to win favor with analysts and investors. Tell it like it is and leave it to the analyst or investor to decide whether to be an owner of your company give the hard truth.
Remember that 2d is being phased out quickly. Companies like CRUS are grabbing at last straws. If CRUS did not have so much debt, it would probably be worth buying them out to put them down and out of their misery. Most pc makers want 3d, even on their entry level computers. Maybe the network orient pcs or ncs will keep 2d but thats about it.
Also recall that S3 has new products continuously coming on line, innnoative stuff, like the audio, the mobile and thecinema quality Faroudja deal. This seems like pretty good manuevering for a company wishing to stay on top of the curve.
S3 has never really gone after the high end chips. They feel that they can have a better return on assets in the lower end. And they may be right. A company like 3dx has a good product now, but when next generation chips come along, they had better learn to make that older chip in mass quantities, affordable enough to use on lower end while being profitable, or see ya later, a quick flash in the pants.
S3 has proven they are not a flash in the pants. They have continuously regenerated their lines and have aggressively gone into new markets and pioneered PROFITABLE lines of product. I think that the company is facing some serious pricing pressure from those who could not hack it and are doing an admirable job of maintaining profitable. Hell, I see a lot of companies losing a hell of a lot of money in this market.
Personally, that s3's stock is at 11 makes me laugh. Wall Street is crazed. I mean, they run a piece of crap nothing stock like ZITEL to 72, doesnt make a dollar, never will, and yet they leave a proven entity like S3 at 11 or 1x revenues. Interesting to say the least..But hell, thats just the way it is. Welcome to Wall Street
Oh, by the way, I started a thread on the Short Term Trading section called, "FROM THE TRADING DESk", to provide an opppt to ask question and present topics to professional traders. A few of my firms traders and day traders will be adding comments. Check it out.
Regards...steve |
