Frank, I don't believe Silverman is "lying." But accounting can be creative, and auditors can see things differently than a CEO with a slew of options. Silverman has no financial incentive for himself or his stockholders to be overly cautious. Indeed, isn't the ABI deal being financed with stock? If I was long CD I would want him to be just what he is, optimistic and only slightly guarded. As for having time to buy, there's always time to buy (unless you bought ENMD at the opening Monday). For example, Citrix a year and half ago. Microsoft threatened to end their relationship and develop its own product. Scared the bejeezes out of everybody, stock falls to 9 from its year high of 60. Stock rebounded to 19, then announced it had resolved its crisis with MSFT. The stock opened at about 27. I'm sure many people thought, oh my God, I'm too late. Uh, not quite. Within six months the price went to 80 something.
If the audit is good, I think this is what will happen with CD. It will gap up on the news, and then climb quickly back to its highs. Everyone has their own sense of risk. At this time, before the accounting is fully clarified, it's too risky for me, but I wish you good luck and I hope to join you as a long in a month or so. |
