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Technology Stocks : Gateway (GTW) -- Ignore unavailable to you. Want to Upgrade?

To: GARY SETO who wrote (5111)	12/29/1997 2:29:00 PM
From: Neil_L	Respond to of 8002

<<<Options Report: Gateway Calls Moving On IBM Takover Rumor By Eric Weiner NEW YORK (Dow Jones)--Gateway 2000's February call options were active Monday as rumors circulate that IBM is kicking the tires at the Sioux City, S.D., direct marketer of personal computers. Traders at the Chicago Board Options Exchange and at a few New York securities firms said the Big Blue takeover rumors started late last week, but that no price is attached to the speculation. "The story used to be that Compaq was going to buy those guys," a CBOE floor trader said. "At least that was the hot rumor over the summer. This IBM stuff really has just gotten started." A single buyer came into the options market earlier Monday and bought a bunch of Gateway's February 35 calls, the trader said. The options recently were up 3/4 at 2 7/8 on volume of 2,691 contracts compared with open interest of 1,363. Calls give investors the right to buy the underlying shares for a set price by a certain time. Investors can use call options to play bullish speculation in a company's shares. Although the initial reaction by Gateway's stock to the option activity was subdued - the shares were down slightly at about 11 a.m. - it's been rebounding through the early afternoon. The stock recently was up 1 1/8 at 33 3/4. IBM shares were up 1 5/16 at 103. Both are trading on lighter than normal volume. While he wouldn't discount the effects of IBM rumors, the CBOE trader said the buyer of Gateway's calls probably is using the contracts to hedge a position in the company's stock. "I'd bet he's doing stock against it," the trader said. "We're not seeing the kind of paper to signal an imminent deal." Executives at IBM and Gateway weren't immediately available for comment on the rumors.>>> Makes you wonder who's selling into all this good news...Prudential maybe?

To: GARY SETO who wrote (5111)	12/30/1997 4:17:00 AM
From: Skeeter Bug	Respond to of 8002

gary, i don't invest on rumors that won't become true. muei is much cheaper. ibm isn't that dumb. nobody is. i invest in earnings and growth. you are right to suggest that gtw investors need to look to rumors to support their price and not fundamentals. this is dumb, imho. but this is what one needs to do.