Netscape -- Giant Killer or Flash in the Pan? Message Board

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Technology Stocks : Netscape -- Giant Killer or Flash in the Pan?

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To: Leo Francis who wrote (2207)	2/1/1998 5:42:00 PM
From: literaryfx	Read Replies (2) of 4903

To All, Reasons NOT to be short Netscape: 1. Sentiment on the stock is extremely bearish. Its closing price has closed lower for 6 consecutive days - clearly oversold. With the bad news already out, betting with the sentiment is a dicey situation. 2. Netscape's price does not offer much downside room. Much better idea to short at least a $40+ stock. 3. One-day price reversal following the earnings report filled the opening gap and ended near the prior day's close on heavy volume. Who was buying on the bad news? When the reverse happens to a successful stock, smart money, for whatever reason, is selling. 4. Higher probability for positive surprises on the stock. Barksdale and company are undoubtedly wheeling-and-dealing now. At the first sign of positive news there will likely be an upside pop in the price because both the public and the shorts will be buying. 5. Because Netscape's browser is one of the two major internet browsers, if there is a takeover bid it could result in a bidding war. Yes, these points are debatable. But the real risk is in buying, not shorting, this stock. It has been my experience that is where the most reward will be.

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