I read this article many years ago on statistics of stock splitting. If
a stock is splitting 2 for 1 or more, most of the time the stock goes up
on announcement and just before the split effect day. After the split the
stock goes down. The reason is that many people decide to sell half of them
so they can never lose money on the investment.
So far it is true for SPYG, and the first part of NSCP also holds true. I
would like to wait for the Q4 announcement, but if the stock keeps rising,
I don't know if it has any gas left after the announcement, no matter how
good it is. The best case scenario is that NSCP signs a deal with AOL,
announces yet another big deal, then announces the Q4 result that is
beyond everyone's imagination (say $50M revenue). If all dreams come
true, it will be over $200 by early February. The worst case scenario is
that NSCP's deal with AOL turns out to be just rumors (and AOL signs a
deal with MSFT instead), and the Q4 result is very disappointing (say only
$25M revenue), then NSCP will drop below $100. I believe it will be closer
to the best case scenario than the worst, but I cannot see the future,
unfortunately.
Because NSCP just broke out of the trading range, a very positive
development, I will hold on to the stock for few more days at least.
The decision is yours. Remember, if you sell now, you are guaranteed to
make a good profit. |
