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Gold/Mining/Energy : Certicom Corporation (TSE:CIC, NASD:CERT) -- Ignore unavailable to you. Want to Upgrade?

To: Ron Nairn who wrote (3073)	3/16/2000 6:24:00 AM
From: Tom Drolet	Read Replies (1) \| Respond to of 4913

Ron: Well here we are at March 16th--roughly half way through the mandatory wait period for Nasdaq listing (30 days). Meanwhile the Nasdaq is correcting (we enter the 4th day today) as most had predicted. The correction is hitting most those companies that have run tremendously ahead of forward earnings (CIC, SW, JDU, IW, IFM, AETH, BALT, MMD etc). What?s up? The head Fed--Mr. G., has been draining liquidity from the system on a gradual basis since the turn of the millennium- so, the rush has been on by Corporate America to issue, via IPO and/ or secondary offerings (read CIC as a near future example), new equity to finance new ventures and acquisitions. This has resulted in an imbalance of available cash to fund all the new equity coming on stream. Meanwhile, investors have correctly interpreted the situation that 'in this environment of higher relative rates', companies that can grow their revenues faster than the average will see their share prices appreciate more rapidly. Over the last 4-5 months the substantial amounts of cash on the sidelines have been pouring into a narrow group of equities that has resulted in somewhat (short term) skewed valuations (read CIC). As is always the case in many types of market flurries, an extreme situation was established. This time it manifested itself as a major dismantling of the " value " sector and soaring levels of margin debt to buy the "mania" stocks above. These tell tale signs are the clues that have led many to be extremely cautious with respect to the market as a whole over the last 30 days or so. So what to expect from this point on? The market will self correct the imbalance - very rapidly. Is the NAZ over valued? Yes. Will the DOW soar to new levels as the NAZ craters? No. A return to some sense of balance (sanity) is now on with a vengeance (typical market behaviour). The big NAZ margin call is on. When it has ripped the last share from the over-leveraged investors, we will, IMO be off (more selectively) again. This could take some time--4 more weeks or so. Now you will have to be a stock picker as opposed to a sector picker or momentum player. What does all this portend for CIC? IMO, CIC will likely continue (with renewed vigour), to get the word out to the mass of US institutions prior to the NASDAQ listing. I assume they will mount a large USA Institutional road show over the next several weeks in order to position the future value of CIC with the major groups of liquid US Institutional and Fund $ that have parked $$ on the sidelines waiting for the correction to play itself out and for the margin calls to extract those last available shares from the grip of overextended retail holders. I look for CIC to start to firm from this point on (say starting Fri-Mon)--and for gradual increased buying pressure (from the newly found US believers) to add to daily volumes--probably noticeably showing as early as next week. I further assume that CIC and their Underwriter Advisors to carefully pick their time to list on NASDAQ--to somewhere close to after when the correction has played itself out. IMO--that could be somewhat beyond the 30 days from March 3 minimum time delay. We have waited (for some) 7-8 years now--I guess another few weeks of sunrises and sunsets will be of little concern for those that believe in the secure 'gem' we know as CIC. Tom D. P.s.--nice wee mention of CIC and DMX in the National Post newspaper story on Brendan Keynes?s Marathon Aggressive Growth Fund in the 2nd Financial Post section today. I will post when I can find an electronic version later.