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Technology Stocks : C-Cube -- Ignore unavailable to you. Want to Upgrade?

To: John Rieman who wrote (25833)	11/28/1997 2:11:00 AM
From: Rarebird	Read Replies (4) \| Respond to of 50808

Short Sellers and Grizzley BEARS are in control of Cubes stock: Let's get real here. Cube is now off 40% from its summer highs and the mauling has only just begun. Let's analyze why it will continue. 1) Fundamentally speaking, Cubes earnings growth will get hurt since they do about half their business in Southeast Asia. The Chinese currency is admittedly about 25% over-valued and they will need to devalue their currency in order to remain competitive with the rest of the countries in the region. Such a move is presently being discounted by the market and being reflected in Cubes stock price. What has not been discounted yet is the analysts earnings reductions in relation to Cube. Just wait till they start coming in! Cubes stock will wind up in a free fall! $20 will look like heaven in a few months. Moreover, pricing pressures have already begun again. We all know, if past experience is any guide, that these pricing pressures will intensify, ultimately affecting earnings, margins and even revenues. With a negative cash flow, Cube could be in real trouble, if the situation in Southeast Asia continues to spread and lasts alot longer than most people expect. 2) Technically speaking, Cubes stock has completely broken down. It is well below its 50, 100, and 200 day moving averages. I know you give very little creedence to technical analysis or studying Cubes long term chart, but if you did, you would see that it is extremely bearish looking and pointing straight down to the $10-$12 level. An analyst even downgraded it on Wednesday for purely technical reasons. 3) Sentimental or expectational analysis: This is the most dangerous factor. Usually when a stock falls 40% from its highs, option speculators buy an enormous amount of puts on the stock. In Cubes case, open call interest on the Dec. 20, 22.5,& 25 is more than double the open put interest. This tells me there is a great amount of complacency here. Option Speculators are well known to jump on a trend and usually lose. But nothing is more dangerous to a stocks fate than when a stock falls dramatically and option speculators are still bullish! This means there are still alot of sellers out there and Cube will continue to GO DOWN! Expectations are still quite high for Cube, which is a very BEARISH INDICATOR! To form a bottom, we will need Capitulation by those that are bullish on Cube. This "throwing in the towel", accompanied by disgust and hatred toward Cube was evident this past June; and I gave a screaming BUY signal on Cube at that time when it was at $17. I'm now giving a SCREAMING SELL SIGNAL on CUBE! I'm giving this sell signal not because I have a substantial Short position on Cube, but because all the fundamental, technical and sentimental indicators are extremely bearish and flashing SELL. It's rare that a stock has all these indicators pointing down. But when it does, it represents maximum risk and acute danger on the downside. To bottom fish at these levels will place one under water in a short period of time. I hope there is an early bounce today so I can add to my short position. I leave you and the thread a quote from Bacon: "Doubt all before you believe".

To: John Rieman who wrote (25833)	11/28/1997 3:02:00 AM
From: Rarebird	Read Replies (1) \| Respond to of 50808

A word on Short Interest: A heavy short position is bullish for a stock; for it adds fuel to the upside momentum when the stock rallies. In Cubes case, short interest has decreased due to excessive optimism and high expectations for the shares. It was in vogue to short Cube last summer, which was bullish for Cube. Many of these short sellers were weak and they have now been flushed out by the bear market summer rally. The short sellers of Cube are now a strong relentless group. Most are very astute and smell a real kill here! Don't underestimate us or our prowess! You will get your sharp countertrend short covering rallies, but not much more than that. Cube won't bottom out until the situation in Southeast Asia stabilizes and that won't be till 1999, in my opinion, at the earliest. One other thing: I've been asked why I have changed my stance in relation to Cube. My response is that I never did change my stance: I said many times last summer that I was short term bullish but long term bearish on the stock. Why not play a bear market rally? Even terminally ill cancer patients go through a period of remission. Second Thing: I didn't short Cube at $34 because it is a momentum stock and I first wanted to make sure it broke trend. I've discussed my short selling philosophy and listed my shorts in the Cube Clubhouse last summer.

To: John Rieman who wrote (25833)	11/28/1997 9:15:00 AM
From: Patrice Gigahurtz	Read Replies (1) \| Respond to of 50808

In my zeal (Friday) to unload CUBE I forgot about my tax free account holdings (some CUBE at $50). I had forgotten all about that although I've written covered calls on those particular shares so if I get $32ish I'm even. However, until CUBE announces earnings, followed by that all important analysts discussion, I suspect her stock is ripe for speculation. My gut feeling is I jumped the gun by getting out Friday. I could have instead sold covered calls $22 1/2 for Dec.