Techtonic, I am sure you are right long term. However, SUNW market cap is still over 40 billion, what does that make the expected price to sales ratio? What do you think the PE can recover to once things stabilize?
I am sure you will agree it has been proven time and time again the market overreacts in general, but more importantly it puts too much weight on near term expectations. As a trader I am more interested in short term price swings -- and short term I am not sure what to make of this stock.
I see two main issues:
1) Who is still short? I bought PUTS when this was around 15 bucks, but I didnt have the nerve to short, mainly because a short squeeze could happen any time it would seem. Then again, who is still short? So many shorts rode this for 50%+ gains, I suspect a lot of them covered in the failed rally last Friday. So, it is possible there is not a lot of short support.
2) Who is NOT long this stock? I have been reading here and elsewhere that SUNW is a "great" deal at 30, 25, 20, 15, and now I suppose 13. Someone will be right, but the fact remains anyone in this since mid 1999 is underwater now.
One last thought. Will we see the "i give up" attitude people claim indicates a bottom, or will we gradually slip to the low of 10 (or whatever it happens to be).
The trouble with this market is it is "obviously" oversold yet continues to sink. I suspect when it is no longer "obvious" to every Jane or Dick we will hit a bottom.
Who knows when that will be.
(OT: Please note I am looking at things from a short term perspective, most of my trades the last 1 1/2 months have been 60% puts / 40% calls on the same security hoping to make moeny off dramatic prices swings, but not claiming to be wise enough to pick a direction. So far that has worked well...) |
