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Technology Stocks : Vertel (VRTL) 10xbagger in the making
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To: Arthur who wrote (98)7/8/1998 5:49:00 PM
From: Dennis J.  Read Replies (2) of 465
 
Was it a Brinks truck?

Below is my post to the Yahoo thread on VRTL.

Stock prices tend to seek out the most recent meaningful trade. This could be the last block trade, a 10, 20, or 50 day moving average, a private stock placement, or the exercise price of warrants. But what does all this mean???

Is it bullish that insiders exercised their warrants, and paid $2 mil. in cash to the company? Probably yes. Especially if their exercise price relates the lowest 20-day average of closing prices in the last 60 days, or something like that. For example, what if these insiders also knew some big events would be forthcoming which would probably raise their future average conversion price?

Conversely, a bad insider transaction would be one where substantially all of ones position is liquidated -- sold off. People who follow insider trades usually treat exercises of options with care, even if some portion of the conversion is then sold. It is possible that money needed to be raised by a partial sale to cover the option conversion.

Think about some of these ideas, and you will likely wind up with a more bullish perspective. Am I happy to see the price at less that $3 when my average cost is above $4? Certainly not. Am I still bullish on a much higher stock price 6-months or more from now? Yes. Did this event change my outlook? Yes, somewhat more bullish.

This is what I believe. Hope it helps.

All IMHOO.

Dennis
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