[institutional buyers and the end of the quarter]
With current TDFX trading history, end of the quarter effects could be quite pronounced. At the moment, many fund managers want TDFX off their books, while others do not want to have it in their portfolio for now but may seriously consider it in the beginning of the quarter or after the earnings/CC. So techs in general including many semis go up for the last two days, and TDFX is stuck in the mud.
To some degree, current TDFX situation reminds me of CYMI - a company that I'd followed very closely in 4Q97-1Q98. This is a solid company with a bright future (IMO), but by the beginning of the year it seemed shorted to death - all the way from 47 to 14-15. It had no analysts support, it reported good earnings to no avail, it did not rise when SOXX was going up and went lower with every selloff in the market. Yet, once the rally in semis took hold, analysts came back and the stock recovered considerably.
This leads me to believe that the key factor that will determine TDFX price in the coming weeks is not its fundamentals or management style, but the probability of a sustained rally in semiconductors in the next two months.
Personally, I am looking for the repeat of the beginning of the year scenario. Many semi stocks are beaten up badly, hovering below December-January levels, so analysts are slowly starting to pump them up. Notably, even Kurlack, who'd predicted that SOXX will fall to 200, is starting to make conciliatory noises. I am not sure if there are objective reasons to predict an industry turnaround, but when the prices are low enough, sell side analysts always find arguments to sound optimistic.
Just an opinion.
Y.
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