Well, I guess I get the honour of putting up the first post of 1999 on this thread, and I see that some people such as techstocker are quite concerned about a possible sell-off next week in internet stocks south of the border and the effect it may have on BII share prices. Others such as Sili Investor are wondering if we are going to see a short-sell on the part of Yorkton among other brokerages due in part to the 350,000 share block traded last Thursday and the effect this may have as well on the shares. Here are a few of my observations that I think January holds for all of us, and if anyone wishes to comment or disagree, please do so by all means.
1) First of all, I believe the brokerages at this stage are going to put as much downward pressure on this stock as they can before we have any major news release of substance (namely positive Q4 results, cable deal etc.) so they can squeeze it for all they can get. The realization on their part is that once we have some solid fundamentals backing this company up, individual and institutional investor interest will peak considerably along with the share price. I have maintained all along that the "numbers" behind any company in the Canadian market will go a lot further in advancing the stock valuation than just a simple news release now and then. This is the month of reckoning, and the brokerages will be less able and inclined to play their "games" to the same extent as they have in the past if they see PROOF of BII's potential. In other words, this is when they will truly have confidence in the company.
2) Secondly, I feel an internet sell-off in the U.S. is inevitable for at least the first two weeks of January. Many investors have made huge, READ HUGE, capital gains in tech stocks for the better part of 1998, and they are just itching to harvest some of these profits and understandably so (I'm one of them!). All of us on here would be doing the same thing as I am sure we would all want to enjoy our profits at their peak right?? I mean let's face it, life is too short to not want to indulge yourself a bit, so this will be a reality sooner than later. The extent of the sell-off is less predictable to forecast so I won't even touch that subject. I believe it could be at least moderate to strong in any case.
3) Finally, in response to these combined pressures, BII share prices will likely come just under $3.00 ($2.80-$3.00 range) but will stay there for only a short time (ie. a few days) and recover sharply on the heels of positive Q4 results and perhaps some other news to accompany it. The rebound will be swift and share prices by the first of February could easily cross the $8.00 mark. NASDAQ under this scenario will become a reality by the end of February and then we can all buckle up for the ride and the huge gains we stand to make by going south of the 49th parallel!
As a final thought, I cannot stress enough the importance of positive Q4 results on share prices in the short or long-term. These results will be the determining factor as to whether or not this stock will be taken seriously by large and small investors alike. It will also determine the level of volatility we can expect, but as a rule, the better the "numbers" look, the more solid a foundation the company will find itself upon. This is what the market has been waiting for for the past six quarters for BII, and I think we are within striking distance of satisfying this requirement. Anything less than the above could pose a major setback for BII, and at this point, I am sure many will begin to seriously reevaluate their positions in this stock.
Kris |
