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Strategies & Market Trends : Roger's 1998 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: MJR who wrote (1346)	1/23/1998 3:08:00 PM
From: vegetarian	Read Replies (1) \| Respond to of 18691

On CFON I think the arb folks sold in the morning in big chunks (20K and 15K blocks) and the folks who were short not holding the convertibles covered their shorts providing a lot of buying support (If they shorted around 7 when the deal was announced, it seemed like a good profit). However, of the more than 1M shares than can be converted, I think only a few have been sold. Once the initial shorts are out, the stock lingers around 5, and more arb activity comes in the stock will fall rapidly; on the next downward move, I doubt there will be as much buying support from short covering as we had the first time (because for those who shorted near 5, it has to go down significantly to go down). The good sign today was arbs are starting to be active sellers. But this is just my speculation and may not be correct. They will probably use as much of the short covering cushion as possible to sell atthe highest price they can get.