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Technology Stocks : Creative Labs (CREAF)
CREAF 0.4480.0%Dec 18 4:00 PM EST
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To: jgideon who wrote (12847)11/19/1998 9:23:00 PM
From: Fred Fahmy  Read Replies (2) of 13925
 
jgideon,

<- When do I sell to get out before the stampede?
- Will the shorts arrive in force to drive down the price? >

These are excellent examples of the exact type of behavior which the buyback is meant to prevent/stabilize.

I don't think CREAF is going to shoot its load all at once just to artificially drive price up and please the day traders/momentum players. A gradual buyback buyback will have a more long term affect. In addition to getting a better average price (and therefore, getting more shares retired), a gradual approach will be more sustainable long term. In the end the stock will have to survive on its own merits (i.e. fundamentals) which most of us believe look good over the next several quarters. The dividend should also help stabilize the stock and help reduce volatility.

As Merrill Lynch says in their latest CREAF report, "Still undervalued by any valuation measure, in our opinion". They are also quick to point out that the buyback should provide a nice floor.

IMO, anyone shorting a stock this undervalued when the company has just acquired the ability to defend itself is not a very bright investor....especially when there are so many overvalued stocks to choose from.

P.S. I liked the action today and I'm glad the stock didn't run up unreasonably quick. Steady as she goes.

FF
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