ACTM $100 Million Cable Modem Contract with MOT Message Board

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Technology Stocks : ACTM $100 Million Cable Modem Contract with MOT

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To: Rob Preuss who wrote (388)	1/10/1998 3:53:00 PM
From: Gordon Quickstad	Read Replies (1) of 1250

I don't know what to make of the short interest ratio to volume. The trailing PE is 14 and the stock is at 52+ week lows. It's not one that I would short. The days to cover isn't all that large, from what I've heard. If it gets up over 10-15 then it's significant. With about 9 million shares outstanding maybe 331,000 share short (3.6%) isn't all that much? One thing shorts have to do sooner or later is buy the stock, and so they will be owners at some point in the future. Perhaps it's being done for hedging (an equal amount of shorting against other separate shares held long) while waiting for the company and sector to develop a more positive trend. I don't believe stock shorter's have to pay margin interest (I believe the sale proceeds are held in escrow at the brokerage); if so, it's a low expense strategy. But if the brokerage lets the proceeds go to the investor, then they would charge margin interest and the position would incur expense and the shorter would want to look for an exit from the position. Anyone have knowledge/experience in this area?

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