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Non-Tech : Knight/Trimark Group, Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Glenn D. Rudolph who wrote (4531)	10/3/1999 12:00:00 PM
From: Gary Korn	Read Replies (2) \| Respond to of 10027

Glenn, I know we are all being sarcastic here, but I wanted to note a few things. Fundamentals do play a role: 1. When ASND dropped from 80ish to 22 in 1999, it was driven by fundamentals: The ISP market (ASND's then-primary market) suddenly dried up (these smaller players, unlike RBOCs, could not afford more equipment). When reality hit, ASND's stock price plummeted. 2. When ASND ran from 22 on up to 80ish in 1998, it was driven by fundamentals: ATM was hot (and still is) and the market appreciated ASND's (Cascade's) ATM product. 3. NITE's drop from 80 since the spring of 1999 also has been driven by fundamentals (in the industry): The growth of online trading volumes that had fueled the spurt to 80 is and was unsustainable. Lo and behold, July and August volumes were well below the torrid pace of the second quarter. 4. The question, then, is what do the fundamentals spell for NITE going forward? I see the following: - Domestic online trading volumes are going to increase over time. Perhaps not at the 2Q99 rate, but they will go up. Therefore, whatever support NITE has at the current price level should only increase, if slowly, over time. That is one reason why writing (selling) puts at this level to take in premium makes some sense, particularly given that the options premiums on this stock are still pretty rich. - Other markets are going to be tapped. Options (ISE), domestic and euro institutions and Euro on-line retail trading are three that we know of. (FYI, AMTD, EGRP, etc. have stated that they will enter the Euro market, and these entities will carry NITE along with them). Japan is not even being considered yet, for it has no on-line market to speak off. On the other hand, it will. (On a personal note, I was just in a 1 hour photo-shoot for a piece that will go in Newsweek Japan on on-line trading; on the computer screen behind me I had open the ISLD book on NITE; doing what I can to drum up business). The lingering concern is what impact ECNs will have on all of this, but I'm not sure they've had any fundamental impact as of yet, at least compared to the much bigger impact wrought by a seasonal decline in trading volumes, as well as a decline from the impossibly torrid pace of 2Q. So, maybe NITE won't rocket up in 2000 as did ASND in 1998. But the fundamentals suggest, to me, that NITE has ongoing and increasing support. Pastnernak pretty much laid it on the line in July. He told analysts to look for something like 20+% annual growth going forward. That seems doable. Gary Korn