I was surprised when I read about it yesterday that the stock
had been as low as 1+
Well, then you must have been following this stock for all of 1 day
and not have bothered to even look at a chart before investing your
presumably hard-earned money. I got in at around $2 last year, in
October I think, and watched the stock languish between 1-1/2 and
1-3/4 until yesterday. At one point it dropped below 1-1/2 and I
was scared that it would go below $1. There was little volume, with
a deafening silence from the company the entire period. This thread
went into hibernation for weeks at a time.
The company sold off their line of games, and started to concentrate
on 2D authoring tools, planning to merge with another company which
has a 3D tool. Now how many 2D drawing/animation tools do you think
there are on the market? I mean, really, you can do GIF animations
with a lot of tools, from CorelDRAW to a half dozen Web page design
packages such as HoTMetaL. 7th Level apparently then recognized that
their real strength was not just drawing and animation, but rather
a particular kind of pushed animation. They announce one license
agreement and a whole bunch of people go into a buying frenzy.
Now all the people who jumped onto the bandwagon are thinking that
the normal share price is $10 and hoping it will go to $20 or $30.
In fact, according to one of the articles linked on a previous
mail on this thread, the company went public in 1994 at $10, so in
a way perhaps they're right. But my entire experience of 6 months
with it is as a $2 per share company. One still losing money,
although it has staunched the massive losses of previous quarters.
Buying hysteria has taken hold. I got out at 12 (a mere 1000 shares)
having previously learned a lesson about getting greedy when I got
stuck sitting on a classic failed day-trade, where I could have
gotten out with a profit, but wanted that extra 1/16. I'm still
sitting on that AXC stock. I learned right away to distrust all the
wishful thinking I see posted on various SI threads. I could only
shake my head at all the posts yesterday making wild predictions
about this stock going to 20. Sure, it could have. I have no
analysis of the company's finances to say otherwise. But that's the
point. Nobody except the insiders - and probably not them either -
has any numbers with which to calculate a share price. How much
profit will this product generate? What is the price? How many will
be licensed/sold? The recent 10Qs don't look too good, but it
doesn't matter either way because it is a different company now.
My gut feeling is that, in the absence of an actual takeover by MS
(which I wouldn't count on), this stock will level out around 7 or
8 and slowly drift down. My sympathies to those who bought in at
double digits, or even at 9. On the other hand, I think any shorts
hoping it will drop back to under $2 are nuts. I went long at $2
expecting the company to eventually start making money and get
their share price up commensurately. I was hoping maybe for $3-4.
What do I base this on? Like I said, a gut feeling only, based on
nothing more that market psychology. What started this ballistic
rise? Did thousands of individual investors reading the news
suddenly all simultaneously read the press release, think of the
possibilities, and start buying? I rather don't think so. I think
probably an analyst somewhere made a recommendation to his/her
clients, or a large investor decided to buy a big chunk, pushing
the volume up suddenly, which attracted attention and got things
going. I wish I knew. But now the early investors (if any) who
started this run presumably have obtained their positions. They
may sit on them or do some profit taking. Two days of 20M shares
changing hands, how long can that go on in a company with not so
many shares (what 6M)? When the euphoria subsides, people are not
going to be so eager to pay $10+ for a company that was $1.75 only
2 days ago, and there are going to be some hangovers.
Well, to whoever was responsible for starting this, thanks for the
rocket ride.
And thanks to the long-suffering investor who mentioned SEVL in
a BROD thread last year, catching my interest.
Now the rest of you please do the remaining fretful longs a favor
and quit wasting thread bandwidth by posting the stock price every
1/2 hour. As if people were glued to this thread waiting for prices
instead of checking the quotes on Datek or wherever. |
