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Technology Stocks : PWAV- the hot new IPO
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To: RFJock who wrote (1025)3/27/1998 12:15:00 AM
From: Herschel Rubin  Read Replies (1) of 1491
 
Today was the lowest volume day since January 2, 1998. Though this
seems like an attractive price, where are the buyers? It is disconcerting
that we don't see large block trades moving in to scoop up value at
these prices. Because of this trading behavior showing continued weakness
associated with declining interest (volume), I suspect something
must be up with PWAV, but I don't know what.

RFJock: You said:

--I would assume that the gross margin should actually be higher than normal
what w/the reduction in OT in the production area --

Gross margins are highest when employees are working the
most overtime because you get the highest work output per employee
without having to pay for benefits (e.g. if 100 employees essentially
do the work of 120 employees, the company is only paying overhead
(office space, medical, holidays, vacations, etc. for 100 employees
while they're extracting the benefit of 120 employees).

Therefore, I would expect margins to shrink rather than improve
if PWAV's workforce goes from overtime to 40-hrs/week.

Unfortunately, it is likely that PWAV may inch down a bit further because
of its weak trading lately and the stock will be influenced by
institutional window dressing as it has now lost over 20% this quarter.

There may be buying opportunities ahead.

Herschel
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