Thread: My assumption has always been that BAY does not have to "replace" "undermine" or in any other way knock CSCO out. BAY just has to maintain it market share in some product lines and reasonably and incremently increase its market share in others to justify a share price of $45+ in the next 4-12 months (and I have already said I see a spike to those levels in 4-6 months). The published market stats confirm that this is happening - overall. Aren't we getting a little over-excited about CSCO's dominance, just now - after all it has been there for some time during which BAY has been to $41 and back and $35 and back. BAY's fundamentals are improving all the time.
As an investor I am as dependent as the rest of you on what the company tells us. I swallowed the disappointment of the last warning because it had an internal logic which I could accept and it held out rational promise. Of course it is disturbing to be told by anybody, let alone an analyst who claims to have specialised information, that when BAY spoke to the investment world about two weeks ago it did not know what he now says he knows. If my money was not involved, logic would dictate that I continue to rely on the BAY's information if only because the analyst is an unknown quantity to me, who will not be held responsible if he is wrong, and he does not provide any verifiable data to support his statement. One could add that other well-informed analysts disagree with him about the scope for upward movement in the share price and disagree with him about downside risk (he suggested that there could be some downside risk but essentially recommends a "hold" at current levels).
But because my money is involved apprehension, if not fear, enters into the equation. This analyst serves to agitate one of the fears I think we all have that BAY could be wrong about its forecasts of sales from demo models - as Paul Fine has said, that is the acid test. If it is wrong, then we have to start measuring quantities and relate that to share price.
If I were not an aggressive trader (as well as a long-term holder of BAY) my overall attitude would be "don't bother me with this pot-watching while the kettle boils" BAY is a fine company which will be double the price in 12-18 months either through growth or through takeover. It is the short-term calculations which create the impatience, anxieties and somewhat exaggerated reactions that one sees on SI threads from time to time.
With reference to the provision for 100,000,000 new shares: I am glad to see it. It is normal for companies with a strategic plan for acquisitions to have such reserves of stock available. Remember that CSCO got to where it was mainly through acquisitions. I would be surprised if BAY has not stated the general purpose of the new shares.
I have always said that BAY holders should sell some or all of their holdings at price spikes, as well as buying on the dips. One does'nt have to wait for it to ge to $35 or $45 or any mystical number to take a profit. I think there may yet be some volatility which will yield 2 points a time, at least. But, if BAY's forecasts are proven right, then I can see a sustained upward run starting sometime in this quarter, probably in May, or at a point when the reports from the channel become encouraging.
Lets hope for some good news soon.
Victor |
