100-200% run -up in ZAP +100-200% in ZAP.COM just about to unfold
see below news
marketwatch.newsalert.com
I do not want to repeat myself so below is a digest from my post # 2477 Apr.01 on SFE thread -part which applies to ZAP.
The scenarios described are about to unfold in ZAP case.By the way the week after my post about SFE it moved +50%/week so far.
ZAP is not SFE therefore I assume only 100-200% upside (I maybe wrong either way).There could be some intermediate -no direction moves because there is many dissatisfied people in ZAP stock ready to cash in on any little uptick (those will be those who did not read this post)plus general market can take little dip in next days.When those will clear the stage for rocketing up will be set.(remember 250% run in Oct.98?).One similar to SFE feature is rights offering = double opportunity.
10 reasons why SFE should go 500% Long article
I picked 500% in the title because it was poping out most often in below analysis. and is below the middle of more careful prognosis of 200-1200%.Help me to narrow this spread.
RESON NO.ONE:GETTING THROUGH BACK DOOR ON S I N G L E HOT IPO - INTERNET CAPITAL GROUP (ICP) = 500-700% See article by Darren Chervitz (dchervitz@marketwatch.com) posted at : <http://cbs.marketwatch.com/news/current/net.htx/source=htx/http2_mw> on March 16/ 99 4:16 PM ET about Flash Net IPO and similar one on Feb 25 99 3:55PM ET about Point West Capital (identical address but instead of "net" after "current" there is world "software".If anybody can deliver the link to those articles ,please do so.Right now under those URL's there is today's story in the category "netdaily" and "software".By the way I would appreciate a tip how to retreive historical aricles from Marketwatch (they can archive above under "columns","news",special reports"and 10 others categorys-so the easiest way seems to be a mail directly to Mr.Chervitz)
He mentioned 5 examples how the price of a company that has a stake in an upcomoing IPO of hot stock behaved.I will explore those further.
1. 07 /30/98 Cyberian Outpost (COOL)priced its IPO at $18.Unfortunate time,right when the 2.5 months bear market started (It can happen to ICG- see below) Since beginning of July 98 price of Winfield Capital (WCAP) who owns ..........% stake in COOL started rising.First stop was 300%,then few days flat and down to catch the breath and up to about 750%. I am finding similar pattern in SFE 's "first forrun" .Right now it is on it's first stop. Up 100% and down a bit ,right before next run of (judging from points 1-4 )300%- 700% The day COOL started trading WCAP dropped to little below its first stop of 300% and then overall correction started and both stocks went further down.See below chart .NOTE:I AM USING QUICKEN 1 YEAR CHARTS WHICH WILL BE DIFFERENT FROM SI CHARTS (THEY HAVE DIFFERENT TIME FRAME SETTINGS) AND SOMEHOW I CAN NOT POST THEM IN FORM OF LINK.THOSE PROCENTAGES ARE BASED ON 1 YEAR TIME FROM TODAY = MARCH 27/98 PRICES.To see those impressive charts is a must.Just punch 4 those pairs in 1 year percentage charts.
quicken.com. <http://www.quicken.com/investments/charts/?symbol=wcap&othersymbols=cool&mavg=NONE&period=1YEAR&ImgSiz=450x250>.
2. 12/03/98 UBID was priced at $ 15.as a Creative Computers (MALL) spin-off.The run in MALL's prices started over 1 month earlier.First stop was on about 280%,short regress to about 220% and then up to 600%.Around Dec 13 MALL dropped way below its first stop to about 150%. But UBID was hot and in the middle of big market run from Oct. lows and went up to 250%.So went MALL back to 600%.Since then both stocks behave similar. This is example of another scenario for SFE: duble top.Provided general market conditions won't be bearisch at the time of ICG ipo - ICG can run up lets say 300% and savy players can make on SFE 300-600% on the way up ,150-400% on the way down and another 300% on uptick to the second top. quicken.com. <http://www.quicken.com/investments/charts/?symbol=MALL&othersymbols=ubid&mavg=NONE&period=1YEAR&ImgSiz=450x250>
3.In Jan.99 Marketwatch (MKTW) started trading.Data Broadcasting (DBCC) which has a............% stake in MKTW started its run over 2 months sooner in the beginning of Oct.First stop: 100% then the longest breadh of all of them -about 3 weeks down to 50 %.Next stop was 500%.The difference in its downturn to the above 2 stocks is that on the day MKTW started trading ,DBCC went down only to 170-180%. This is 80% above first stop and over 100% above lowest point in a "breath period" after first run.. So here is another possible scenario for SFE.Note that people are getting on the bandwagon sooner and sooner.In SFE case 4 months ahead of the action which actually rises the risk of longer breadth period after first 100% leg up and chance of a greater intermidiate pullback .To wait for the same 600% return 4 instead of 2 months means 2 X lower return Assumming the latest period in SFE trading between $ 65-73 is a breadth after first step up , it may never fell down after ICG ipo below $100 (after run up to lets say $240 = 600% from $40 base).Note the difference between DBCC or MALL. Those were 1 time shots.SFE on the other hand has a pipeline full of surprises and if the company will play right PR game and time next IPO's right ,the stock can be right back on its way up. Their chart can be more symilar to CMGI or WCAP -just one way - up. (see point 4) quicken.com. <http://www.quicken.com/investments/charts/?symbol=DBCC&othersymbols=mktw&mavg=NONE&period=1YEAR&ImgSiz=450x250>
4. 03/15/99 Flash Net Comm.(FLAS) priced its IPO at $ 17.Point West Capital (PWCC) who owns.........%stake inFLASH started its run in Jan 99( 2.5 months ahead).First stop 100% then for a week or two breath and down to about 85-90% and again run up to 330%.This one was the weakest run up (just 330%) maybe because it catched latest market correction or because FLAS - an ISP- like most of small ISP's is destined for extinction in the opinion of most marketwatchers and it is not to sexy stock anymore. On its way down PWCC reached level of first stop ,over 100% as of today. Above numbers were taken from 1 year chart.On 3 months chart below the numbers for PWCC are : 50% first step,200% top, back to 50% downturn. quicken.com. <http://www.quicken.com/investments/charts/?symbol=PWCC&othersymbols=Flas&mavg=NONE&period=3MONTH&ImgSiz=450x250>
SUMMARY OF "REASON ONE" Not the SFE itself but general market trend from now till ICG ipo and the thread of Internet bubble burst are primary variables affecting the scope of SFE's run.Acampora is predicting DOW between 8500-11500 for this year.If the run to 11500 will coincide with ICG offering SFE can go in the upper range of above proxys 600-800% from $ 40 base.That's $ 240 to 320
Note the difference to above 4 proxis.They started their run 1-2 months before their baby's IPO's.We are 3-4 months before ICG ipo so,SFE has still time to form another base up or down from latest support level at $ 65.Maybe latest $64-73 will turn into solid 1-2 months base and it will count its few hundred percent run from there.In that case we are looking at $ 350-500. This will not happen unless the company will do couple of splits EXECUTED IN A FLASH during the run. and unless they will maintain the excitment by steping up their PR efforts
REASON FOUR: THE BACKDOOR HAS DOUBLE POTENTIAL = RIGHTS OFFERING
Again this requires to run some sophisticated models to come up with numbers and I want to post this piece before the end of the week.
Please develope this tought.Below very symplistic ,but valid line of tought.
Take a company X .You will receive rights to buy it on the first pricing of eg. $10.You got it.Now the Investmet Banker will start to spinn it
Week before first trade he will rise the price to $ 15 ,two days before to $19 and on the eve of trading to $ 24.First day pop on the board is to $50.
You got yourself a 500% gain ( this 500% repeats itself over and over - boring).Haven't you seen hundreds of such scenarios lately? I did and I am sick I wasn't a part of them!That means till now before I become proud shareholder of SFE.
If above 4 proxys had a run of 300-700% just on the promsie of owning hot IPO INDIRECTLY, SFE should go much higher up because here we will not only own those IPO's through SFE shares but also DIRECTLY and FOR THE LOWEST PRICE POSSIBLE.
Please,post here few real life examples what was the difference between first pricing and the high of first day trading.:
1.of few latest IPO's eg.above UBID,COOL,FLAS,MKTW etc
2.Price history of few SFE's IPO's most of them I understand were not too sexy
One helpful postig could address nuts and bolts of the process of of rights offering,how we will receive them ,can we flip them right away,is there a market for trading the rights without buying first,is above described process correct in SFE case,what was your experience with previous offrings? etc
AND IF YOU KOW ABOUT ANY OTHER COMPANY OFERING SUCH A RIGHTS ,LET ME KNOW -I'LL CONSIDER TO BUY IT ON THE SPOT.
Well ,ZAP did this offer and I am in.
FINAL TOUGHTS
This looks to me like the best medium term pick I came across.It is so visible ,so obvious and so easy to virtually point the date and the price on this future date.(ideal for playing their options) that even analitycs can see this.And most important,the future price is very,very right.It is so right to me that I cashed a stellar preformers making lately 5-10%/week like SUNW,EMC,AOL not to mention CMGI and bought into SFE.(thought cashing AOL looks like a mistake).
It seems SFE's first 100% run is attributable mostly to reaction to their announcments about moving into Internet and nice PR effords.The back door phenomenon
which can push the price to $240-350 hardly started jet.
FINAL TOUGHTS
This looks to me like the best medium term pick I came across.It is so visible ,so obvious and so easy to virtually point the date and the price on this future date.(ideal for playing their options) that even analitycs can do this.And most important,the future price is very,very right.It is so right to me that I cashed a stellar preformers making lately 5-10%/week like SUNW,EMC,AOL not to mention CMGI and bought into SFE.(thought cashing AOL looks like a mistake).
It seems SFE's first 100% run is attributable mostly to reaction to their announcments about moving into Internet and nice PR effords.The back door phenomenon which can push the price to $240-350 hardly started jet.
wellab
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