Thomas,
As one who does not share the irrational exuberance of some, I think it is extremely difficult to pin down any numbers for this stock. And that is part of the allure. The only thing that seems to be concrete at this time is that it appears that RDRAM is about to become the standard for all new INTC chipset machines starting sometime in 1999.
All other projections for numbers are futile. The company only earns about $0.25 per share right now, perhaps a tad more. However, based on the scale that DRAM is used, and the current market cap of $1.5B or so, that buying RMBS here is getting in on the ground floor of a possibly great company, at least for the next 2-3 years.
That said, I would not think that you were crazy or stupid to short the stock in the morning, particularly in light of how this stock has been trading for the past 14 months or so. However, the major-league run this stock has had, as well as the trading patterns seen on Level II screens suggest that there have not been many sellers lately, and that it seems like entitites are trying to accumulate based on the potential.
I would not short this based on the now-becoming-archaic paradigm of traditional valuations--they only seem to work now when a company slips and misses solid earnings/revenue estimates. However, based on the recent trading patterns of the stock, perhaps a short from 83 to 70 or 75 is not unreasonable.
Your questions are more than welcome, I just wish that someone could answer them. For all the "analysis" people here and on the Street make, I find it hard to believe anyone really knows yet.
Regards,
G |
