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Technology Stocks : Cymer (CYMI) -- Ignore unavailable to you. Want to Upgrade?

To: Volsi Mimir who wrote (8840)	11/10/1997 4:30:00 AM
From: Yakov Lurye	Read Replies (1) \| Respond to of 25960

AN INTERESTING PREVIOUS POST on this thread (#7055, thanks, NYC) shows quarterly changes in CYMI positions for various funds as of 9/30/97. According to this data, SOROS and MORG were NET BUYERS of CYMI in the previous quarter - they are with you, Eddy, like it or not. By September 30 MORG03 (MORGAN STANLEY?) had 650+K shares, other big holders included APPLEGATE (1,23M shares), FIDELITY(>1M shares) and a group coded GEDR (938K shares). These four account for 4M shares out of 6M float. All of them had retained or increased their position through the quarter that saw falling stock price and negative rumours. The point I am trying to make is that CYMI has strong institutional support. The "institutional longs" have a vested interest in restoring the stock price to higher levels. They will continue to "average down" on CYMI, or will start doing it soon. The post also names State Street as a net seller (sold 2M shares and owned none as of end of the quarter). This name also came up in conjunction with convertible bonds issued during the quarter. As was mentioned before on this thread, shorting against convertibles is a fairly common practice. Holders of convertibles short the stock to lock in gains or to protect their position. In a long run, however, they are also interested in restoring the stock price. With CYMER, time is on the side of longs. IMO, the process of active accumulation by institutions is already going on. It may take time to absorb the extra shares effectively floated by the bondholders, but the management has forecasted two good quarters coming. So far, they had delivered on their promises. P.S. I have developed a model describing stock price behaviour after many shares are shorted against the debentures. It is too simplistic to discuss it seriously, but in the case of CYMER it gives me $21.6 as the target price around which CYMI stock should stabilize before going up. Based on this, I am thinking about "averaging down" on Monday - must find cash first though. Happy investing, Y.