<..You really screwed up there, why didn't you pick up a whole position? :-)..>
It might well turn out to be a full position. If it doesn't hold 3 3/4, I'm very likely gone.
(sorry, this was meant for the WCII thread)
On some of the noise and whining here...
I have no problem with hearing the negative side of WCII, in fact, I appreciate hearing them (when shared intelligently and with respect to the level of sophistication of participants here.)
Fundamentally, we will bleed cash for at least another 16 months. In a shaky market, companies like this become easy targets. But our current "bleed" is as we all know, for a payoff in the future. And I have no doubt that payoff will come. Broadband LL is the "mantra" for
the next 2-4 years, kicking in big time next year. WCII will provide what is desperately needed.
As Ed has previously voiced, I also think management dropped the buildout ball for the last two quarters. Length of time to deploy hubs (90-120 days) notwithstanding, we SHOULD have still shown more hubs installed, as well as more onswitch and onnet customers than we have.
WE HEARD they planned on doubling the number of hubs (from 60 to 125) over the next two quarters (4 1/3 months left). Now it seems they are backing away from their 125 hubs by YE guidance - it's now stated as "over 100" (which could be possibly 38% FEWER). Don't know how this will affect margins/revenues from onswitch and onnets, but they better get their a** in gear. No more vacations. Whatever it takes, even if we need to have 14-16 hour days 6-7 days a week from top management, to ensure they meet their previous buildout promises.
Technically (as in stock chart), WCII looks pretty bad. We could certainly see lower 20s or worse, and who knows WHEN and WHY we would see buying increase. Why buy anything, let alone WCII, in such a shaky market? I mean, if we are in for 2-6 quarters of lowered general market valuations (and who knows really?), then gains will want to be protected and losses minimized.
OTOH, I am hearing there will be a series of announcements that should be favorable. Hopefully they will have more bite than the no-dollar announced contract with Yahoo. And the potential spinoff of New Media as an internet company is a nice idea, but just may be about 6-8 months too late.
However, through all the doom and gloom, and possibility that we could test 20 (shudder), the risk of not being long, or even being short, is that when M&A activity resumes in the sector (and it WILL), the stock will likely jump significantly, making it harder to get back on. And as we are NOT exposed to Asian downside (in fact, some components like chips may be cheaper as a result), CLECs - especially broadband, MAY come back into favor as sidelined money looks for valuation plays for the next 12-18 months.
And of course, nothing wrong with successfully trading the stock in whatever direction works. But to have to wade through these substanceless chicken little/sky-is-falling posts is a distraction at best. IMO, if the whiners are short, they should just be honest and say so. Otherwise, they should at LEAST just sell out and quit crying here as if THEIR pain is anything special, or better, offer some substantial intelligent discussion of the issues.
As far as shorts- the only shares of the 32MM float that can be shorted are those that are owned on margin. Certainly not all, and hopefully we are near the end of shortable shares. So it's just greed on the part of the longs that has created the opportunity for shorts.
And now, when longs put more money into the stock, rather than just paying off margin debt and moving the position from type 2 to type 1 (margined account to non-margined), MORE shares are bought on margin. Then when others borrow and sell this lendable stock, the longs whine more as the price drops further as real sellers come in to not fight the trend.
Anyone who gets shaken out due to margin calls has only themselves to blame for letting that happen. If the current longs want to see some real quick upside appreciation, don't buy MORE shares, just pay off your margin debit and move your shares into your type 1 account. This takes those shares out of the borrowable/shortable pool. This also forces the shorts to find other shares to borrow, or else close their position by buying back. No one who knows this company and the hurtlingly inevitable direction of communications, and who is long shares unmargined, really has ANYTHING to worry about IMO.
Greed and fear guide the markets. Some will get scared out, others called out. If you think the stock could go lower (and even though it may not, anyone would be stupid to think it couldn't), and there is concern for margin calls - cut the greed and loss bleeding and sell some shares and PAY OFF your margin (don't just meet the on margin 50% requirements). You may not have near the opportunity to do so if it does retest 20 and the teens, which is certainly possible.
But for the longer term (think 12-36 months), IMO this company is a major communications play.
All IMO anyway. |
