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Strategies & Market Trends : Rande Is . . . HOME -- Ignore unavailable to you. Want to Upgrade?

To: Steve168 who wrote (16583)	12/11/1999 10:07:00 AM
From: Rande Is	Read Replies (2) \| Respond to of 57584

. . . . . .Shorting such low floaters as PERL has its problems. . First, as I said before the increased volume actually attracts a number of traders, which help to keep the tiny float dry. How many 15 million share trading days can a stock with a 3.2 million share float stand? Second, when a stock makes a run from 2 to 25 in a few days it is bound to attract a certain number of buy-and-hold investors that truly believe the company is worth something. . . this does two things. . .it further helps keep the float dry and it helps the stock establish support levels on the way down. Third, when there are no big pay days for a few days in a row, many of the short-sellers get bored and move on to greener pastures, leaving the die hards holding the bag. . . now should the stock get any news/PR [what company wouldn't pump at this stage?], there is less juice holding down the top and off she flies. . .trapping the die hards. Fourth, it just so happens that PERL is not that bad a company. . .61% sales increase, 45 mil in sales. . price to sales= 3.6 . . frankly, the stock was way undervalued at 2.50 and in the data communications sector, is probably closer valued in the teens at this stage. Fifth, the Linux fever is hardly cured. There will be sudden lapses along the way, which will send this low floater back toward the moon. Sixth, the downside potential hardly outweighs the horrendous risk of PERL signing a deal with a major and gapping up 10 points the next day. There are plenty of other far better short candidates than this. . .with far less risk. . .and more reward potential, in my opinion. Yes, as we discussed, CORL made a great short play yesterday. . [good for 10 points within 30 minutes of my short call!!]. . ..far better than PERL. And for the record, I have never held a position in PERL long or short. Rande Is