Hi Brian,
My take on this run;
I don't believe the buyout theory especially if INTC is the rumored suitor. For one thing, I don't think for a minute the DOJ would approve especially in light of the recent CHPS acquisition. IMO, CPU + graphics chips + premiere sound standard would be too much Intel Inside for the DOJ to accept. I don't think they are going to let Intel monopolize the entire guts of the PC. At least in the graphics chips arena there are several other players (SIII, Trident, etc.). In the case of of sound, however, CREAF would give Intel virtual monopolies over two key internal components (CPU's and sound).
I also find it impossible to accept that this run-up is product announcement related. I can't believe that all these institutions are suddenly jumping on the CREAF band wagon because of one product announcement. The Encore announcement was much much more significant and had much less of an affect.
A stock buy back might be cause for a significant run-up but I don't think the SES would leak out this information to the big brokerage firms.
What about this theory. CREAF is fundamentally extremely strong with a very bright future given their recent acquisitions, expanding product line (especially DVD), strong cash position, low P/E, and franchise brand recognition (due to Soundblaster). Perhaps their recent presentation at the investment conference sparked enough interest that some of the big players finally took notice and thought to themselves, "if we are going to establish a position, we better start now before it's too late". It would only take a few big players like GSCO to get things started. Perhaps others, who like us think CREAF is terribly undervalue, were waiting on the sidelines because until now they saw no urgency to establish position since it was moving sideways. However, seeing GSCO and a couple other big boys jumping in they might have suddenly developed a sense of urgency and piled on.
At any rate what a run! Don't know if this was wise but I sold July 30 CC's today to protect some profits and lower my basis. Given my entry level and my target price of 35, 2 1/4 for the calls and 30 for the stock is close enough to my target and would suit me fine should I lose the shares. Now watch....someone will probably come and offer 40 for the company <GGG>.
Good luck,
FF |
