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Technology Stocks : IFMX - Investment Discussion
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To: Doug who wrote (11755)8/28/1998 3:12:00 PM
From: Robert Graham  Read Replies (2) of 14631
 
My PC was a big PIA...but now have it working. It pays to research a board before purchase for there is some crap out there like this MB from FIC, the 503+. I am short on time, but I will share with you here some of my thoughts on IFMX.

First off, there is new selling that has been taking the stock down below 5. Once the earnings report looked to have no effect on the stock, there was some initial selling. A move back up by the stock was predictably met with more selling. As soon as the stock moved back toward 5, there was additional selling. Sentiment is very negative with no one willing to step up to purchase, even the speculators that normally follow this stock.

I expect this selling to continue. There may be a rally to 5 or 5 1/4 before the next leg down. If the stock bounces only to lets say 4 1/2 before encountering additional selling, expect new lows to be made. Negative sentiment is in the driver's seat for this stock, along with very nervous stock holders using rallies as an opportunity to sell since the stock's response to last earnings report indicates to them that this stock is not going anywhere for the forseeable future.

I personally would use any rally to 5 or above as a time to sell this stock. I do believe prices below 4 is now entirely possible. Some new selling interests have entered the picture and IMO will attract other selling interests which will continue the selling. I suspect that company which has been financing Informix's cash flow is doing the same thing. This is not good for IFMX since the holder of the warrants will be more reluctant to convert to preferred which means that this key source of cash flow for Informix will now dry up.

Four most important factors that determine short term future of a stock's price:

1. Market trend (market and industry). This does not apply in Informix's case.
2. Sentiment, which is very negative with IFMX stock.
3. Money flow (major interests which is institutional) which does not apply for IFMX as it once did except perhaps to explain some selling. I have not verified by looking at the tape.
4. Technicals. Negative sentiment is overshadowing the technicals right now. So I have been primarily looking at support and resistance levels.

Stocks that attract speculators due to volatility which is usually news driven also can have an impact on a stock for a few weeks surrounding a news event. This no longer applies to IFMX the same way did did just a few months ago. So I cannot expect there to be any rallies except for bargain hunters. But with the market sliding, there will be better opportunities for bargain hunting elsewhere. So IFMX may not even have this on its side to keep it from reaching below 4. IFMX is going the way of PHYC as far as how the stock trades. PHYC is another stock I closely follow for my father.

This current situation should come as no surprise since both the technicals and the way the stock has been trading has pointed to this possibility over several months ago. As time unfolded, more evidence mounted that this possibility for IFMX would become real. Just as the current market drop should of come as no surprise to anyone. The evidence was there and in the making for some time now, with huge warnings that the market gave everyone just in the past few weeks.

Geez...where did this soap box come from?? ;)

Bob Graham
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