I thought with visibility improving we would not revisit these price levels. Any comments ? Is the fact that ASND fell 9% today on relatively low volume a positive or negative ? Finally, are we likely to see tax loss selling right up to 12/31/97 ? Thanks for your comments.
Getgo,
I don't know if this post is directed to me, but I'll venture some comments:
1. The fundamentals and "visibility" on ASND didn't change from yesterday to today. Mgmt is still predicting at least 23cents/share earnings on revenue of 280-290MM. (I'm predicting we see 300MM revenue for 4Q). Insider selling did not occur between yesterday and today. No other news with the potential to move the stock came out.
2. The above being the case, today's action is most likely attributable, as others have said, to options expiration. In that regard, there are substantially more open calls than open puts. That being the case, the MMs have an incentive to drive the share price down to 25 rather than up to 30. I'm guessing there has been considerable short selling to help accomplish that goal, and that we won't see much below 25.
3. The downward manipulation (if that is what happened) was made easier by the fact that volume on ASND has dried up. This is another reason why a drop on low volume is much better, in the scheme of things, than a drop on high volume. (I.e., forces other than fundamentals can have an impact when volume is low.) The return of volume on improved fundamentals can easily propel this issue higher (though it is difficult to wait).
4. As I believe was the case today, Th and Fr. will be options driven. I'm guessing that we see short covering on Monday, with an associated upward move. (I wouldn't mind if the powers that be wanted to see 30 by Friday, but I'm not counting my chickens.)
5. Lots of people (not me) made money in the market this year. ASND is a tax loss, and will be so right through 12/31. If the stock loiters through year-end, there is a real potential for a pop at the beginning of 1998.
6. If ASND was lowballed on an acquisition offer (by, perhaps, LU or CPQ), then the best thing it can do is show its stuff with 4Q earnings to be released on 1/20. If that doesn't preciptate an offer within reason, it should at least show that, fundamentally, the company is sound and on-track. I'm wondering if earnings mightn't "leak" to LU before the official pronouncement, giving the acquirer a last chance to catch ASND at a reasonable price before an earnings-related rebound. Just a thought.
Gary Korn |
