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To: ild who wrote (155583)3/12/2002 11:29:53 PM
From: mishedlo  Read Replies (1) of 436258
 
RealMoney Pro citing a hedge fund that shorted naked April 12 1/2 puts (75,000 contracts) on CMVT - that's pain

I did not believe it until I looked.
75000 puts vs 400 calls or something like that.

Check April.
They are there.
=====================
Perhaps the intent was to force the price to some unreasonable level. To avoid losig 40 cents * 7.5M, the MMs might want to try and put those shares to the hedge fund. If that does not happen the hedge fund collects .40 * 7.5M (which is not a bad chunk of change). If this quarter is a one time anomoly (I question this from looking at the chart), then perhaps CMVT is a steal at these prices, and the hedge fund gets the MMs to do something it can not do in its own accord (force the price to some really cheap level).

Trailing 12 month earnings are $1 (which seems pretty good). But last couple quarters were not good. The question is where do we go from here?

From YHOO
biz.yahoo.com
CMVT has 9.64 in cash!
How bad is that?
My big worry would be the debt to equity ratio, not horrible but certainly not very good (I perfer companies with no debt at all). However, I am sure 9.64 should tide them over for quite a long time.

Other than that I do not know how to ascertain the fundamentals of the company.

I thought those were March PUTs but a double check shows that those were April PUTs. This gives the MM or seller a clear incentive to hold the price low until April Expiry, but it also give the hedge fund reason to prop the stock up in the meantime.

Thoughts?

M

M
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