Covad Communications - COVD Message Board

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Technology Stocks : Covad Communications - COVD

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To: Andre Williamson who wrote (10455)	5/11/2007 1:15:38 AM
From: rjk01	Read Replies (1) of 10485

an answer to your Q from the yahoo board Covad's stock hovered around the 1.20 level when, suddenly, it tanked for reasons management could not explain. No one else could. I think a level of 1.20 was about what could be considered a reasonable value based on trends. I would argue that the collapse to the 60 cent level was unusual and inexplicable - not to use the word "irrational". The news was that they signed with ELNK, that they bought NextWeb and that they would sign 3 more LPV contracts before the end of the year. It was Covad's management that made these statements. In addition, ELNK was projecting impressive market penetration with LPV. Based on this, there was nothing irrational in the run-up to the 2.50 level (forget the momentary spike above) from the reasonable valuation of 1.20 before the news. Now they would like to disown the news and forecasts they put out at the time, and claim that in the present context the run-up was irrational. The present context is a complete failure to deliver on forecasts. Now, what is irrational?

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