Hi, Dave - (This post has turned out to be much longer than I had originally intended due to stored-up thoughts which I couldn't pass on (work and SI password problems) and, in any event, is largely Dave-directed. Thus, if anyone else wishes to by-pass the incessant ramblings of a stock jock exuding unbridled optimism, feel free to disengage now!!)
Regarding your post #7875 and comment ". . . we are likely to see analyst coverage with a "buy" within the next three or four weeks."
If you'll permit me to respectfully interject my two cents worth, I concur with your general observation about the prospects for pending analyst coverage, although I think your estimate of the timing is a bit premature. While it might behoove interested analysts to pick up coverage of the company (if for no other reason than to have a crack at GMGC's potentially lucrative investment banking business down the road), for analysts (of any major name-recognized brokerage firm) to get comfortable enough with this company to recommend the stock, they'll need to build a model with some identifiable sources of revenue. We obviously don't know yet, for example, the amount per car that GMGC will be receiving, and this is a major consideration that will need to be clarified for revenue-forecasting purposes. Perhaps we'll get some hard numbers, or at least some reasonable guidance, on the conference call or shortly thereafter. (Betcha one thing for sure, though, there's gonna be a heck of a lot more interested analysts/investors on the March 8th call than ever before.)
Then analysts will want to have in-depth discussions with various GM/GMGC/other management/technical personnel to get fine-tuned projections of potential GM/Toyota/Honda? revenues, as well as to get a better handle on the royalty/revenue prospects of such ventures as myTalk, Microsoft/QUALCOMM, Excite@Home, Kenya, eBay? and whatever else GMGC is working on that we know very little or nothing about at this point. Then they gotta write the report, get it proofread, get it through compliance, legal, etc. All things considered, my best guess for an initial Wall Street recommendation on the stock would be around the mid-year 2000 time frame, at the earliest.
But even so, I don't think that we have to wait for the research reports/recommendations from analysts to flow before we see the stock moving up (witness the past several months). The buzz surrounding this company and its stock is getting louder as time goes on, and of course there could be news announcements from the company in the weeks/months just ahead that could spur additional interest in the stock. At this stage, probably 90% of all investors/institutions out there have never heard of GMGC. But with the increasing volume, stock price, recent news, etc., its name recognition appears is growing steadily now. If, to pick a date, on June 26th the stock closes up $1-$2 points on high volume but with no news to account for it, you can bet pretty heavily that a significant brokerage firm will be issuing a buy recommendation on the stock in the next day or two. In any case, I have a hunch that the currently increasing interest in GMGC suggests that it'll be in double-digit territory by the time we're listening to the conference call. There just seem to be too many potentially positive developments/announcements that management could address on the call not to have both feet in the stock prior to March 8th. And if we actually get some good news on the call, the fence-sitters could add further fuel to the upside following the call. Moreover, the pending Nuance IPO seems likely to be favorably received by investors, which no doubt would have positive implications for GMGC's stock.
Parenthetically, with all the stuff going on at GMGC, can you imagine what the stock would do if it were IPOing in today's bullish technology-stock environment, with a prospectus detailing much of what we don't yet know, and a legion of underwriters out there telling the company's story to prospective investors? My guess is that it would be priced at $15, open trading at $40, spike to $55, and then close first-day trading at around $50. What's your guess? Remember, the stock jumped from its IPO price of $14 in February 1995 to $32 in an instant, and I honestly don't think that their prospects for revenue-producing opportunities were any better then than now. Sure, they had some other great brand-name alliances and strategic investors at the time (AT&T, SONY, Apple, Motorola, Sanyo, Northern Telecom, to name a few), but the stock was still very speculative. ("There is currently no established market for personal intelligent communicators . . . The company believes that the electronic marketplace, whether Telescript-based or not, will take a decade or more to develop fully and there can be no assurance that it will ever develop in the manner the Company currently envisions." - IPO prospectus, 1995.) And in any case, the IPO market is much hotter now than it was then.
BTW, if there are any shorts lurking out there, I've got a little free advice: Do yourself a big favor and cover quickly (before you get another one of those dreaded margin calls), and then quickly enter your order to buy as many shares as you were short. By doing so, you could be benefiting yourself in two ways. First, you'll likely prevent your (OnStar-equipped) car and home from being repossessed in nine months. And second, you'll probably fairly quickly offset your current losses, and hopefully you'll be solidly back in the black later this year. Anyway, I'm not sure I can figure out why anyone would be shorting any stock during the greatest bull market of all time. The S&P 500 index (1424.37) is trading at 25.5X the current consensus earnings estimate for this year ($55.90). By way of comparison, the Nikkei topped out at about 60X earnings at the peak of Japan's last stock market boom. Yeah, our market/economy are not exactly comparable to Japan's, but why couldn't our stock market - the backbone of the greatest, most productive, most profitable nation on earth (which is enjoying a record economic expansion accompanied by relatively low inflation/interest rates) - eventually reach somewhat similar valuation measure before this bull becomes fully exhausted? Feel free to do the math (my H-P shuts down in an error mode when I try to do percentage-increase calculations that large), but there appears to be a lot of room left on the upside. And if the S&P moves that much, the Nasdaq and companies like GMGC should do even better. Thus, the "buy the dips" advise of many stock-market strategists continues to appear appropriate. Before we have the first serious correction when you'll be able to make some real money on the downside (starting around the 2007 time frame, based on demographic trends and flow-of-funds analysis), there's likely to be the typical speculative blow-off stage of the market, which should carry many of the heretofore overlooked micro/small/mid-cap stocks to significant new highs. But that's another story.
Anyway, Dave, I'm glad that you've come around to feeling a bit better about GMGC as more of a core holding, rather than just as a trading vehicle. I personally would rather enrich myself than my broker, and I don't have the time to spend hours filling out the capital gains/losses schedule. But if someone can make money consistently by actively trading, or by shorting for that matter, hey, I'm all for it. That's what we're all attempting to do, right?
Lastly, re your #7856, just to prove my point I'll have you know that I personally have two of those crisp $5 bills in my wallet right now. (I'm gonna put one in my safe deposit for the benefit of my heirs, and I'm having the other one framed to give to my wife on Valentine's Day. I think she'll be thrilled, don't you!!) Oh, sure, I would have gladly taken three from the guy, but he said he only had two left. (Actually, what he doesn't know, and please don't tell him, is that I would have eagerly taken just one of his cool $5s for my $20 - so I really fooled him, huh??!!!) Strange, though, he seemed like such a nice/smart guy, and I thought we were becoming friends, but as soon as we swapped bills, he quickly disappeared back into the street crowd. Oh, well, I'm sure I'll run into him again sometime - I've still got a couple yukky ol' $20s I want to get rid of.
Continued great investment success to you, Dave, and to the other awesome participants on this thread.
Effervescently yours,
ea
P.S. - All of the above, of course, is IMHO, and I promise to limit future posts to 5-10 sentences!! |
