lin huan chen,
I think you are on to something. BAY went up after bad news
because analyst gave it a buy signal (or some positive support),
which I think scared of shorts.
I think that a lot of COMS low price is because of heavy weight
of shorts. I get the feeling they're like vultures over this
stock. I think COMS will barely make earnings, and market is
looking for excuse to push anything up. BUT, it is possible
for COMS to go down more - it would have to be on STRONG
negative news. A lot of negativity has already been priced
into stock so dubious news will probably just maintain the
status quo.
So, if management can give stock holders any sign of
improvement, then market strength and others will push stock
up. If strong negative news, it's possible to see stock in
the 20's. I personally hope not. I'm long for the VERY
long term.
I like their expansion into Europe with Siemens. Hopefully
this is not a lot of hype.
I agree with COMS modems being superior over the competition.
I read the BOARDWALK article and was impressed. But, I agree
with some that the modem competition is more intense in 56K
upgrade compared to past upgrades. Then again, hopefully more
modems (volume) will be sold than ever before.
56K modems are the only reasonable (price wise) hope for
quicker internet access for the average joe for the next
year or so. My concern, is that ISP's and consumers are
somewhat wary of all the standards problems, and will make
transition into 56K V.90 slow - thereby slowing COMS earning
growth. We'll have to wait and see on this aspect.
Also, COMS is more than just a modem company. More products
are in the pipeline. But sounds like IT departments have been
swamped with new technology and need time to sort out
their decisions. This may further slow network buying - hopefully
just a short term thing.
So, yes, there is reason for negative concern, but
more reason for positive outlook. Some shorts (IMHO) are
outdoing the negativity. I wouldn't want to place a bet
on COMS short term, but I think COMS will be OK for
the long term.
About their accounting problems. I not sure how much of
a screw up that was. My understanding is that they didn't
do anything illegal. I'm not an accountant, but it seems
like negative hype is over done. If you take Herb Greenberg's
position (on TSC), sure it doesn't look ethical. And
sure, the SEC convinced them to rearrange their numbers.
But Herb has somewhat made an example of COMS because he
knows that this type of thing is done VERY FREQUENTLY.
Analysts have seen this many times. They're not school children -
they know it's part of the game. They don't like COMS doing
it, but what they really don't like is that it appears that
COMS has lost CONTROL of their business. Most important
to analyst is to make sure that COMS has future earnings,
not that it's a 'nice guy'.
Either way, it
seems like the SEC has caused them to tow the line, and
at some point, negative analyst will not be able to carry
a grudge forever. COMS knows they're under the microscope,
so they'll probably go out of their way to avoid any
kind of suspicious looking accounting disclosures. IMHO, they
already seem to be more communicative with Wall Street, and
seem to be trying to cover their butts more. I think this
is good. So, on to the future question - will COMS products
have a profitable future in the network sector.
-Joe
P.S. Where do you get your daily short quotes? |
