I sold my COMPAQ holdings late on Friday. Early yesterday evening, I decided to get back in big-time, within the next few days, if the uptrend was confirmed. The late evening and overnight news about suspension of the internet retailers deals cancels that plan. It may be time to time to formulate a new plan, to buy COMPAQ on a significant pull-back in the share price. If that pull-back occurs - and I don't have enough information early on Tuesday morning to be able to judge that, it might be a very short sharp correction. On the other hand, if the company fails decisively to clarify things and reassure the market, it could be one of those "channel-stuffing" type stories that regurgitates itself constantly and depresses the share price. At the moment, the story does create uncertainty and we all know that the market does not like that.
What we need from the company this morning is the bottom line. Will this adversely affect this quarters and this year's revenues. The company has already commented that the retailers in question represent a relatively insignificant fraction of sales. The Red Herring article which questions the competence of the management of Alta Vista and its strategy exacerbates a nagging worry I had on the same subject (Riechers and I exchanged a post on it) and coming as it did on the same day as the other story, the two stories will probably reinforce each other. |
