Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : CSGI ...READY FOR TAKE-OFF! -- Ignore unavailable to you. Want to Upgrade?

To: angel who wrote (1588)	12/15/1997 4:24:00 PM
From: tech	Read Replies (1) \| Respond to of 3391

angel, What we are seeing here has really nothing to do with the S1 or any fundamental change in the company. This is a market phenomena every year. This is the month that investors and portfolio managers clear out their portfolios and investors take "tax losses". This is called tax-loss-selling. In most cases investors who have had profits for the year, sell the stocks the have losses in so they can use them as write-offs. (it is a little more complex than this, but generally this is what takes place) Since CSGI's stock price is significantly lower than where most people have bought the stock, we should expect some of end of year selling pressure come our way. Most stocks that have been very volatile with big % differences between the high and lows will be effected by this. (The year 2000 stocks fit this scenario perfectly) The next couple of weeks, especially the last week in Dec., should prove to be very interesting. That is, if no news is released between now and then. I am looking to pick some more up in the last week if I see prices really dip. However, one thing to remember is that people who use a loss in a particular stock for "tax loss purposes" are not allowed to buy the stock back for 30 days. So for example, if you sell CSGI on Dec. 24th and you write off your losses, you can not buy the stock back until Jan. 24th. (well you can buy it back, but then you can't write off you losses in it) So, say now it is Jan. 5th and the company makes a major news release, if you wanted to use CSGI as a write off, then you can't buy the stock for 19 more days. If you decide to buy the stock, then you can't use it for a write off. Now keep in mind that bargain hunters (like me) know that this is going to happen and use this time to try to pick up cheap shares. Most often the first few weeks in Jan. will be when you will see them jump in, however the last week in Dec. is typically when the war between the tax loss sellers and bargain hunters begins. What do the MM's do while all of this is going on ? Well, as you can imagine they will screw everyone in site. The will dump the price on the sellers and as soon as a buyer comes in, they will run it up, while at the same time picking up some cheap shares for themselves to sell to the next buyer or to hold in the inventory for the market to pick up the first week or two in Jan. If you have not invested in CSGI and plan to, then I would wait until I see how low the tax loss selling will take it. If anyone has a high average and wants to average down, it will also be a prime opportunity. S1 If the S1 was going to cause a sell off in the stock price it would of done it when it was filed. The press release the company made, although was the stupidest decision by a company I have ever seen, had nothing to do with the stock price. It may of confused some other investors who automatically assume that someone is selling all those shares, but in general if there was going to be any damage it would happen when the filing is made. There are a lot of things I would like to see this company do differently, but I still like the stock and will probably buy a little more the last week of Dec. if prices go lower. Shorting I don't remember whos number I gave you ? was it HRZG. I don't know what you said to them, but usually you need to have a large account to open one with them approx. 50k min. or you need to talk to the trader for CSGI at HZRG and tell him you wish to trade blocks in CSGI and ask him to refer you to someone that will help you set up an account. You can't just open an account with them to trade a couple of thousand shares. If you plan to short, you should have at least 50% up to 75% equity against you short position. That is if you plan to short 5,000 shares of CSGI at $5.00 = $25,000 then you must have a minimum of $12,500 but in most cases $18,750 in your account before you can take that short position. If you don't know someone or don't want to trade large positions, chances are you won't be able to open an account. Most of the firms like for you to be an accredited investor, i.e. ($1 million net worth or net income of $200,000 for the past two years) before they even let you think about doing such transactions. regards,