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Non-Tech : Gulfstream Aerospace GAC -- Ignore unavailable to you. Want to Upgrade?

To: Carmine Cammarosano who wrote (155)	5/28/1998 2:28:00 AM
From: Creighton C. Smith	Read Replies (1) \| Respond to of 197

Frankly, Carmine, I'm not sure what to think here. Do I understand this secondary? No, not completely. It strikes me as a little strange; however, in all of my past experiences with companies that have made secondary issues of stock the proceeds have been used by the company for capital improvement, debt reduction, construction, or some such. This case, where we basically have an owner who wishes to sell a part of his holdings, is very different. do you understand how GAC is able to stay at $43? Sure. People are willing to buy at $43.00, but not $43.50; people are willing to sell at $43.00, but not $42.50. (Sorry, Carmine, I just couldn't resist. It's late, and I guess I'm a little punchy. No offense taken, I hope.) Is it telling you anything that the price is maintained? At this point, all I can say for sure is: 1) The first of the shares from the secondary appear to have hit the street on May 13. 2) Total volume since the 13th has been 9,627,800 shares (see below). 3) Even if we assume that every transaction in GAC shares since the 13th has been for shares from the secondary (an assumption I do not think we can reasonably make), just under half of the 18 million shares referenced in the S-3 SEC filing have yet to trade on the exchange floor. So, it seems likely (to me, at least) that the bulk of the shares were directly placed with institutions at the offering price, and that those institutions are holding. 4) Average daily volume over the last 10 trading days has been over 950,000 shares, almost three times the 52-week average of ~320,000 shares/day, yet the price has remained stable. So, apparently the influx of those new shares that have made it to the exchange floor has not depressed GAC's share price, in spite of the fact that 5) its generally been a bad market of late. So, maybe the stability in price is a good indicator. Maybe we'd be up near $46 or $47 if the Bull hadn't paused to catch his breath. My friend, I think we just have to wait and watch. I, for one, believe that GAC is a great company with outstanding prospects for long term growth. I also have faith that, eventually, the market at large will wake to the fact that this company has been available at bargain basement prices for quite some time now. When that happens, my shares (and yours) will rise in value. In the mean time, I'll quietly acquire more shares as my cash flow permits. And, if you get to feeling frustrated that the stock seems to be going sideways right now, just remember that one year ago GAC shares were trading at $29.625. Remember that, think about the 45% gain and the fact that we are STILL undervalued, and smile. Its what I do. FWIW, the volume figures since the 13th follow. Regards, __Creighton Date Total Volume 1998-05-27 871200 1998-05-26 655200 1998-05-22 751400 1998-05-21 434600 1998-05-20 479900 1998-05-19 310300 1998-05-18 1037100 1998-05-15 398900 1998-05-14 697600 1998-05-13 3991600 Total volume: 9,627,800 (5/27 and 52-week volume data from quote.yahoo.com. Historical volume data from teleserv.co.uk )