Tom, Sam, Barbara, all ...
Just checked ... 30 day average volume on CIEN was around 1.2 million shares. Since the NAZ double counts all trades (buy/sell) lets say 600,000 shares trade hands daily. My opinion is that really only 200,000-300,000 shares actually trade, the rest is MM churn, but seeing how some on this thread don't want to hear about that, for the sake of arguement lets just ignore that. Since 80 million shares will be released in the lockup, which are owned by many, many insider and non-insider shareholders, the disposition may not be very orderly. But lets say they decide to get in line and calmly sell half there holdings ... thats 40 million shares. That comes to 67 trading days to absorb that quantity, and thats assuming there are ready buyers and no other sellers. That puts us nearly into the next quarter! (Keep in mind, the shelf life of a cutting edge tech stock is usualy about the same as a pound of cheddar cheese)
Also, to maintain the price at $50 would require investors to pony up some $2 billion. (GS might even choke a little on that figure). This at a time when the market is already giving people vertigo. To put that in perspective, in the current raging bull market, mutual fund inflows for ALL equity funds were $12 billion in June. The downturn today at 54+ again shows the trader range from $45-$54. IMHO the traders will vanish or all be short after AUGUST 7 because you will never be able to know when the next down tick is a six figure share block hitting the open market. Keep in mind that the offering was only able to unload 9 million at the offering price of $44.
What kind of real, sustainable earnings would be required to maintain the price in the face of such a dramatic selloff...
jim |
