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Non-Tech : American Eagle Outfitters -- Ignore unavailable to you. Want to Upgrade?

To: Joseph Stumpf who wrote (224)	5/11/1998 11:32:00 PM
From: Bob Weeks	Read Replies (2) \| Respond to of 325

Such analysis fails to support a short position. Attributing the current retrace in price to insider trading - is in my opinion fallacious. I submit that insider trading here is mild. A TA study of the way a stock acts prior to and following a split (along with prevailing market conditions) appears to me to be much more meaningful in explaining the current activity. For example examine day charts of the last 70 or so small-to-midcap splits that trade at least 50k shares a day. It can be noted that a significant majority (80%+) of the time when the issue price declines on the Ex-date (that's May 11 for AEOS) as it most often does, the issue will rise between 10%-30%+ from a low occurring either on, or shortly following, the Ex-date. This bounce has usually occurred within 7 to 10 trading days, but in some cases may take as long as a month. In my opinion, when AEOS bottoms in this retrace or a lower price within the next few days, an increase should begin that will take the stock back through $43+ (pre-split $65+). The caveat to this of course assumes all other things being equal, i.e., the market in general holds, which in itself is tenuous. Further study will show that the recent price activity in AEOS is not unusual for a healthy stock of a well-managed company whose stock has a high TRO (turnover ratio), which AEOS has had going into the split. Jawboning a theory that can't be even partially substantiated i.e., a complete lack of correlation and no demonstrable or repeatable connection of event-to-activity is voodoo at best. Further, if one goes too far with such claims there is the distinct likelihood that libel charges could be brought. Finally, the entire notion that the mild insider trading that has taken place here should be a cause for great concern, is great subject material for an odd-lot-short-sale convention, but hardly worthy of serious consideration in making an investment decision. Always IMO Best wishes Bob