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Biotech / Medical : Zonagen (zona) - good buy? -- Ignore unavailable to you. Want to Upgrade?

To: Linda Kaplan who wrote (4830)	7/12/1998 5:34:00 PM
From: Bill Wexler	Read Replies (2) \| Respond to of 7041

I don't short anymore based only on my perception of overvaluation. I want to see the business mature and have some benchmark or comparison group for assigning a multiple. That's the basic problem with internet stocks, they're all in la-la land so no such benchmark exists - yet. Also, there is no hint of scam or compelling bad news - yet (with the possible exception of companies like DCTI). There may come a time to revisit ATHM, but it is still a bit too green. To give a simple counter-example, I recently shorted JC Penney (JCP - I wrote about it on Roger's thread) at around 75 a share. Obviously, there is nothing wrong with the company, but I feel that business would slow in the summer and the company was grossly overvalued relative to other retailers in this very, very mature sector. A nice thing about shorting in this situation is that volatility is relatively low. Companies like ZONA, CCSI, CYBG, ZITL etc. are both grossly overvalued and there is compelling bad news or strong evidence of fraud/corruption that is publicly known. These are "slam dunk" shorts - but much more volatile since the management of these firms are more concerened about getting rich quickly off stock, instead of building a legitimate business. This makes these stocks more volatile in the short term as management and stock promoters struggle to unload shares on to their victims.