Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study! -- Ignore unavailable to you. Want to Upgrade?

To: Dnorman who wrote (8103)	8/5/1998 10:36:00 PM
From: Herm	Respond to of 14162

TLAB does appear to be petering out from the PUTs perspective since it is approaching that lower BB. Today, TLAB actually dipped under $70 down to $67.50+ for a brief moment and then moved up on small orders. It was a MM masterpiece example of fade (selling or buying against a paradoxical trend in the opposite direction)! Now, here is pure speculation on my part! Normally, I would stick to the technical charting factors of the BB and RSI. And, for the most part I may bail out when TLAB bottoms on this cycle. Suppose that TLAB used their overly inflated stock price to help them buy up their (new merger) smaller company COHR with the extra leverage. The TLAB value was mostly paper in shares of inflated TLAB stock. Hey, if I take a five dollar bill (fair value based on industry group P/E) and paint $20 on it (hyped up P/E) and then come to you with a business deal (take over merger offer because your stock was being hammered) and I'm going to use my new $20 bill to closed the deal. Sooner or later the truth will come out that somebody paid an inflated price for the merger and few got very rich fast. "Under the terms of the merger agreement, first announced on February 16, 1998, Coherent stockholders received 0.72 shares of Tellabs common stock for each share of Coherent common stock they held..... For the immediate future, both the Tellabs and Coherent product lines will be maintained to ensure that the needs of existing customers are met. The combined company plans to launch several new products in the near future and to explore new product development activities as it seeks to address the need for next-generation call-quality solutions." "The transaction will be accounted for as a pooling-of-interests. Coherent will operate as a wholly owned subsidiary of Tellabs. Subsequent to the closing, Coherent's common stock will no longer be quoted on the Nasdaq National Market." The added operational cost are going to impact TLAB EPS. Now the TLAB stock price is dropping to normal levels. The big money is running away with the profits in hand. INSIDER TRADING - TLAB SOLD SHARES Filed by Title Action Shares Price Transaction Filing NELSEN THOMAS SLOAN D Disposed 2,500 $49.25 08/01/97 09/10/97 UILLINAN ROBERT J VP Disposed 1,500 $47.88 07/30/97 08/11/97 QUILLINAN ROBERT J VP Disposed 2,000 $48.00 07/30/97 08/11/97 GELBER ROBERT M VP Disposed 4,735 $47.58 07/03/97 08/11/97 These guys are not sticking around with their money! Note, the excution price. I think TLAB will sink to that price level from the current $70.00. If that is the case, when TLAB hits the lower BB and RSI sinks I will cash out the profitable PUTs I'm holding. I will watch TLAB and see if it does break downward. I may be wrong. Who knows?