Zitel at its present price of $36 is one of them ...
Zitel if it goes to $55 is the second ... and
Zitel if it goes to $72 is the best of all ... do you know that at this price, Matrididgm woud be valued at over a billion dollars ... now how many development-stage/early implementation private companies are valued like that ???
Whenever I short a stock, like I initially did when Zitel was 44, I ask myself, if the stock doubles on me, I lose all my money, correct ??? ... At that point, what will the company be valued at and has anything changed in its business prospects... that's also what I asked myself when IOMEGA was 50 and a $5 plus billion dollar company, so I shorted it too ... this company is the still a good shorting opportunity ... sure their products are great, but they can't maintain their prices even if there's hardly any competitive product ... their biggest competition is the PC industry ... can you imagine somebody paying $400 for a jazz drive when at some point they can get a fully configured Pentium for $1000 with 3 gig hard drive ... the jazz drive becomes too much of a cost percentage wise ...
Going back to Zitel, some of the die hard longs are dismissing the Barron's article. To summarize, CNBC was questioning why the public will give Matridigm a valuation that's at least 20 times more that what a private placement of 7% of the company would value ... they claim that one of the owners of this new 7% stake was a key person in bringing up Matridigm, so the purchase price was heavily discounted ... Now, I want to ask this die-hard Zitel lovers, if there was a buyer of 7% of Matridigm for $1.5 million, surely there was a seller too ... either the 7% stake was an authorized/not issued stake, so somebody else owned it. If it was authorized/unissued, then the current (before the transaction) owners of Matridigm in essence owned it, and Zitel, having 35% , was a 'seller' of $525,000 worth of Matridigm (35% of $1.5 million)... Zitel being a big holder surely had a say in this transaction but couldn't use its own valuation of Matridigm in seeking out more than a paltry $525K, considering the dillutive effect of the transaction... Now, if that 7% stake is actually owned by somebody else, he obviously didn't follow Zitel's valuation of Matridigm because he settled for 20X less ...
I believe that the valuation placed on that private deal is actually closer to the true worth of Matridigm rather than what the market is reflecting now...
HOW ABOUT THIS NO-LOSE SITUATION:
These same guys who paid $1.5 million for 7% of Matridigm ... put out another $1.5 million to short Zitel ???
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