PSFT - Fiscal 1998 - Discussion for the next year Message Board

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Technology Stocks : PSFT - Fiscal 1998 - Discussion for the next year

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Oct 29 5:00 PM EST

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To: Melissa McAuliffe who wrote (2305)	10/1/1998 2:46:00 PM
From: LLCoolG	Read Replies (1) of 4509

Melissa, Adding PSFT ot the S&P 500 will initially drive the stock price up, but it is mainly due to the arbitrage players trying to skim some profits. This event is very good for PSFT provided that the S&P goes up. PSFT does not always follow the general market, but this inclusion will cause it to follow the general market much more closely. So if you believe that the S&P goes up from here, PSFT will benefit. But during corrections, PSFT will also go down. IMO, while it is not a terrible thing, it takes away from PSFT's previous strength--momentum play. Its strength was that it was not a hugely known company, and investors benefitted greatly from that. Continual earnings surprises and the growth rate drove speculation up, and the relative anonymity and independence from moving with the market led to larger short squeezes and continual upward movement. Now it will act more like any other stock, although many S&P stocks still benefit from momentum. This inclusion makes it a more fundamental play, probably to the delight of many people here. Regards, G

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