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Strategies & Market Trends : The Stock Market Bubble -- Ignore unavailable to you. Want to Upgrade?

To: Roger A. Babb who wrote (852)	7/28/1998 6:01:00 AM
From: Moominoid	Respond to of 3339

the trial member period would be expected to increase the number of posts, perhaps at the expense of quality. I also was a trial member before they were clearly marked. The quality of their posts does however look lower on average. Suddenly there seem to be a lot around. For example yesterday I got a post like this: To: +David Stern (0 ) From: +Les2 (Trial Member) Monday, Jul 27 1998 12:31AM ET Reply # of 65 Telsra hav the potential to at least double in value in the next year or so they have all ready nearly doubled in 8 months This is a 2/3 government owned telecom in Australia whose shares were sold cheap to make the voters happy. It's P/E at 25 is much above the market average here. Also the actual share price hasn't doubled (there was a first installment of $A1.95 and the second of $A1.35 is due in November - the price of the installment receipts is $A4.55). David

To: Roger A. Babb who wrote (852)	7/28/1998 3:42:00 PM
From: Lizzie Tudor	Read Replies (1) \| Respond to of 3339

Roger, Don't you think it would be better for SI to go back to a reasonable lifetime membership fee (say, $60), possibly accept some advertising, and forget these trial memberships? I agree the trial memberships lack quality, in fact there was one guy on the I2 thread this weekend that had to be removed by the webmistress. I'd rather not see that kind of stuff, but, SI has raised the lifetime membership to $200 - which is TOO HIGH - so in order to get any new members they have to offer a trial of some kind. I think SI was best about 2 yrs ago when they had a $45 lifetime fee. I don't mind a little advertising, do you? Michelle

To: Roger A. Babb who wrote (852)	7/28/1998 8:29:00 PM
From: Kip518	Read Replies (2) \| Respond to of 3339

Now that it is starting to look like a serious market correction (didn't say crash, yet) is beginning, I have been thinking more and more about the implications of all those stock options collected by tech employees as employment incentives. Some folks have written about how they allow companies to overstate earnings by not accounting for options as costs associated with employment. But I'm more interested in the likely consequences of falling stock prices & and the declining value of these options. Strikes me that the when the employees begin to see that their company's stock price is coming down fast they'll begin to cashed in & sell stock asap. This can quickly start a vicious cycle. The cascade of all those shares hitting the float in short order will cause these high tech stocks will fold in a heart beat. (A recent piece posted on Stocksite, sorry didn't save URL, said that companies like XCIT & YHOO have something like 3 to 4 times the number of employee options outstanding as they have public shares issued). It won't take shorts & nervous longs to sink a stock fast if (when) these folks start dumping. Also, collapsing shares prices will quickly injure the companies themselves, as employees may leave with the stock deals aren't working. A couple of folks on longwave have been speculating about this. IMO, it's worth thinking about. One wrote: ÿÿ Microsoft clearly looks ready to give up the ghost. The current stock price has made theirÿ recruiting model totally ineffective as the options granted at current levels may stay under water for a long time. Who is going to work for them for mere wages? For a company like MSFT, if the recruiting business model doesnot work; it hollows them out at the core. The machine needs to be fed young lives, in exchange for lots of money dangled in front of the young recruits in terms of gains on options. And at current price they cannot do it. They would need to go down to low 20's to restart the process. csf.colorado.edu Another, an employee of Cisco wrote: I had a very interesting experience this afternoon. There is a guy whom I have known for many years before either one of us joined Cisco. He has approx. 500K worth of options gain that he can cash out at today's price and he has not cashed out a single penny ever at Cisco. My guess is that this amount is more than his networth, which means this is large amount of money for him. When I tried to tell him that the party (big gains in options) may be over he exploded. He is usually a mild mannered guy. I had tried to reason with him in the past that if the stock keeps going up he will have lot more gains coming as Cisco is very generous in giving more grants every year at annual revue time. If Cisco goes down as much as we expect I wonder what will be his state of mind. There are many other people that would have no incentive to continue if the stock drops below 30 and doesn't recover within 6 months or so and the market is doing poorly as well further confirming the gloom. csf.colorado.edu