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Technology Stocks : Creative Labs (CREAF) -- Ignore unavailable to you. Want to Upgrade?

To: RLM who wrote (7565)	12/26/1997 3:39:00 PM
From: exitleft	Respond to of 13925

RLM, I think it is you who is nervous about your short position on CREAF! A little fear is good. Good luck on your short! Exitleft.

To: RLM who wrote (7565)	12/26/1997 5:04:00 PM
From: Doug Fowler	Read Replies (1) \| Respond to of 13925

Sounds like you may be nervous! First, you say that Creative's low was at 4 earlier this year. WRONG. The lowest price Creative traded at in 1997 was 8 5/8. (You have to go back to September of 1996 to find a price of 4 for Creative.) Second, those prices were when the company was losing money. In the past 12 months, the company has delivered profits in excess of $2 per share. Third, the company has $5 per share in cash. Fourth, Creative was at $29 a share just a few months ago. Fifth, because about 25 percent of their business comes from Asia, the company has already stated that they will be hurt somewhat by that, but that part of it will be buffered by increases in manufacturing efficiency and lower costs. Sixth, when Sim said Creative would be doing a great job to hit the low end of the earnings forecast, he was setting expectations, and I believe you can be sure that they WILL at least hit the low end. (Don't forget that Creative fell $5 in the days after he made that remark.) When earnings come out later in January and the market sees that despite all the problems beyond its control that Creative still made the low end of the numbers, the stock will go back to at least the mid-20's. If you are short, now is a good time to cover your position. Good luck, Doug

To: RLM who wrote (7565)	12/26/1997 8:26:00 PM
From: Hitch	Read Replies (2) \| Respond to of 13925

RLM, you asked "is anyone nervous", I would have to agree with Fred and say that yessiree somebody is, YOU, and if I had shorted 3000 shares on 12/19 I would also be nervous. BTW, we never did get an explanation of why you stated that CREAF was "artificially up" on 12/19 "because of the option expiry" --don't get me wrong, you don't owe us an explanation but I would think that you would want to share your reasoning so that more people could jump on the short bandwagon and drive the price down so that your position would become profitable. As for your most recent comments-- I don't know where you got the $4 dollar figure for CREAF in 1997, was it perhaps from the same source you got your flawed option info? As Fred indicated, 8 5/8 is the lowest I have seen. Your comment about the head of the company stating he "would be happy to hit the low end of the estimates" actually he said "low part of our target" was technically correct, but he was not referring to earnings, he was talking about revenue growth which had been projected earlier to be in the 10% to 15% range. His comment about earnings was "Creative is still on track to achieve projected gross margins and meet earnings forecasts for this quarter and and the year ending June 1998". At this time I will be happy with 10% rev. growth, especially when that revenue growth will come in large part from sales of Creative's newer and higher margin products. Earnings forecasts for this quarter are .77 and for the year $2.53 (Yahoo Finance). Lets see now-- that gives us a PE of less than 8 on a stock that is approx. $9 off its highs, a company that has new and high margin products on the market, a new product to be introduced in the next 3 months which is based on the highly regarded Voodoo chip, an expanding market for DVD, recent aquisitions which will open up OEM contacts, approx. 80% of sales in the strong US/Europe markets, and production based in low cost areas of Asia. YUP, somebody is nervous, THE SHORTS. I don't mind you trying to talk down the price of CREAF, but please use figures and comments that are based on facts and not your imagination. Think positive RLM, when CREAF is selling for $25 in January-- your 3,000 share short postion will only be around $18,000 out of the money--which is hardly the end of the world, and if, as you said the price is "artificially inflated" I am sure that it will come down to your target (HA) well anything is possible, take a look at RMBS, maybe that will cheer you up, it is only selling for 46.50 a share (well off its highs) of course it has earnings estimates of .05 for this quarter and .23 for the year ending SEP 98. Good Luck RLM -- perhaps you should think about covering that short position--take your loss-- and move on to either a long position in CREAF or a positon in another equity. Hitch