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Technology Stocks : Audio and Radio on the Internet- NAVR -- Ignore unavailable to you. Want to Upgrade?

To: iceburg who wrote (277)	7/22/1998 12:04:00 PM
From: simarx	Read Replies (2) \| Respond to of 27722

Hey, Iceburg, it is my opinion that this is a day-trading stock and it is based on a good amount of DD. However, take a look at todays action, the price opened at 8 1/4, so all those who bought and held are now losing. It's a tough stock to hold. You keep mentioning "undervalued," however, NAVR's own under-writer considers it fairly valued at 6 to 7 in its current condition and 8 to 10 if it spins off NetRadio. So the stock is trading within its 3 to 6 month range. So their optimistic estimates show the stock is at value now. If NAVR does not spin-off Net Radio, then the stock is trading at a premium. In 6 months NetRadio will be a separate company with NAVR holding a minority stake. It will be interesting to see the short interest report next month. My experience tells me that at every pop the professional shorts are coming in. I wouldn't be surprised if some of those hyping this stock were not on the short side of the court. With NASDAQ Smallcap, you need to take what seems like common sense and turn it around. The shorts want this thing to keep popping. Shorting is the only way they can preserve their profits without converting their preferred or unleashing the commons on the market. They have more control. If their average common price on the 7+million commons (converted preferred) is 2.70 and they are short an average of 8.5. Then they made a profit of 8.50 - 2.7 = 5.80 or a 215% profit. No matter what happens to the price, the shorts holding the preferred can't lose. They cover their own short position. Look at the weight that hits the market whenever the stock gets near that 9 + ceiling. With the amount of momentum buying going on and the number of times the old float has been turned over, it can only mean that the stock is being diluted at every pop. The dilution is occuring from the short selling. Unlike typical short selling, the PP cover buying is not going to hit the market, which means very little relief for the longs. That is one of the reasons why it is so hard to recommend this as a long-term investment. The best we can do in the meantime is daytrade it until the company cleans up the financial situation. The PP hangs heavy over this stock.