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Technology Stocks : Westell WSTL -- Ignore unavailable to you. Want to Upgrade?

To: dave turliku who wrote (17716)	1/15/2000 12:17:00 AM
From: P314159d	Respond to of 21342

CLAP! CLAP! can't keep up with ya DT. Poised for a breakout if even with a retrace to 10.75! Mid 15s and I forgot to check my chart! If you did not trade the gap side I don't see an easy trade this week unless you set your target ahead (like 10.75, 10.8125), but you may not reach!. And remember the 15-16 area awaits so you don't wanna miss that one. Plus longer term resistance is much weaker (16), it can run at any time. Now if you wanna be a market maker, you can buy the next retest below and immediately sell off of 11.5 and 12, just to make a half-buck or so, but hold the bulk for the breakout, since you just stomached 30% (13 to 10). I got a thou off of gapside for shits, but had to buy the close since I wasn't overloaded and needed those shares. Besides the optiions guys had to have covered their bets around 12 for now. I know the market is scary as hell, but WSTL can be a GREAT out performer this year and stage one is now. If you played from 96 til now is NOT the time to retrench. Now at 14 or whathaveyou, let's see what happens in Q1.

To: dave turliku who wrote (17716)	1/15/2000 9:36:00 AM
From: LiPolymer	Read Replies (1) \| Respond to of 21342

<<Lily - has CC hedging begun to clear - clear skies ahead ??>> Hi Dave, Don't think they're quite finished with us yet, but let's say they have significantly less left to hedge than they did a month ago. They have about 3.1MM convertibles total to hedge. After the December short interest report it was estimated CC and Friends were about halfway through those (http://www.siliconinvestor.com/readmsg.aspx?msgid=12441563). The December short interest report covers the trading period up until December 10th (Trade:12/10, Settlement:12/15, Dissemination:12/27, Publication:12/28). Since then, we will have had 27-1/2 trading days as of this coming Thursday's close. Wait...something sticks in my mind about this coming Thursday...hmmm...oh, yeah! Westell earnings are reported! (It's getting hard to contain excitement and anticipation.) The volume really tapered off toward the end of 1999, and only really started to get moving again (above 500K) the past week or so. The cumulative volume from December 11th through January 10th is still close to 17MM shares, and allowing for the slowdown around the holidays, I would still say the cumulative volume is trending up month-over-month. I believe we are seeing further evidence of the hedging activity here. As the volume (i.e. buying interest) dries up, the hedgies have to push the price down to entice the buyers, since they seem to have a minimum quota of shares to sell per day. As soon as the volume got back above 500K/day, the price got back above $10 (http://chart.yahoo.com/d?s=WSTL). This selling action differs from a "death spiral" attempt in that they are steadily, methodically selling, but not attacking the bid. Their goal is to sell their quota per day, not to drive the price down. OK, so when will they be done with us? There are ~1.5MM of the convertibles left to hedge (using 27.5 trading day window from December 11th to January 20th): @ 30K/day => 825K @ 40K/day => 1.1MM @ 50K/day => 1.375MM They may not be quite finished yet, but must be getting close. They also might back off in advance of the earnings report, to sell at a higher profit if they expect the report to be good. Or they may accelerate selling the convertibles into higher volume, then selling the warrants into any pop after earnings are reported. It's really hard to say, but CC has shown a tendency to sell now in complete disregard of any future appreciation, even if that future appreciation is almost certain! They loan, they hedge, they convert, they cover. They go for the jugular if they smell blood. It would seem their DD needs not extend into the markets or future prospects of their clients (victims?), as they are satisfied to leave huge piles of money on the table in favor of a guarantee they will not lose a nickel. For example, we already know from the Level II evidence they are happy to sell WSTL in the $9's. (If anyone has Level II, the hedgies seem to be using INCA, REDI and BTRD. Any other comments or observations would be appreciated.) In conclusion, it appears the convertible hedging activity is coming to a close, removing the artificial cap on the price, allowing the opportunity for WSTL to trade more in line with its forward PSR, as Paul has pointed out. They still do have the ~900K warrants to sell against, but there is no time limit on these, unlike the convertibles which must be hedged before the WSTL/TLTN buyout is consummated. Regards, Gary