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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study! -- Ignore unavailable to you. Want to Upgrade?

To: Herm who wrote (11655)	10/10/1999 11:51:00 PM
From: Jon Tara	Read Replies (1) \| Respond to of 14162

Herm, thank you very much for your comments on CMGI. One bit of information was a bit old, though. CMGI reported their 4'th quarter results on Sept. 29. See: fnews.yahoo.com An excerpt: "Excluding non-recurring acquired-in-process research and development charges, the consolidated operating loss widened to $49.8 million in the quarter from $20.7 million posted in the same period last year and from $29.6 million generated in the third quarter. Operating losses during the year expanded to $120.6 million from $59.9 million posted in fiscal 1998.... ... Despite the weakness in the operating results, CMGI delivered net income of $401.1 million, or $3.75 per share, in the quarter thanks to a $661.2 million gain realized on sale of GeoCities ... to Yahoo! Inc. ... This compares to earnings of $0.28 per share registered in last year's fourth quarter and a loss of $0.24 per share posted in the third quarter. For the full year, the company delivered $4.16 per share compared to $0.42 per share in 1998. Given the company's perpetual acquisitive mode, the relevance of quarterly operating results is significantly diminished and will remain such in the foreseeable future." -------- Basically, CMGI is NOT in the Internet business. What they ARE in the business of is buying low and selling high - Internet businesses, that is. Now, that said, they do have properties that are intended to eventually produce income on an onging basis, including a newly-formed consulting group. But the basic CMGI business model is to acquire small Internet-related companies at an early stage, grow them, and ultimately spin them off. With the GeoCities transaction, the "sell high" part of the equation has started to come into play.

To: Herm who wrote (11655)	10/14/1999 7:45:00 PM
From: NateC	Read Replies (1) \| Respond to of 14162

CMGI LEAPs Expect CMGI to move to a higher price with the potential for another split in Jan. 2000. Buying the 70s JAN 01 LEAPs @ $57 and hold for higher prices. Herm wrote: You could CC the 130s CALLs @ 12 or more and cover your nut of $70 strike+$57=$127.00 if called out at $130 with another 2 points. That a total of $14 points or 25% by Jan. 2000. Not too bad! Plus, if you get called out it would taxable in 2000 and you would not pay taxes until 2001. Herm....interesting way to calculate the nut.....underlying PLUS the cost of the LEAPS calls. I posted a previous note showing my SCH LEAPS calls nut at $1 and change.... would you care to educate us all a little about why you calculate the nut on Long LEAPS this way?? thanks Herm