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Technology Stocks : The New QLogic (ANCR) -- Ignore unavailable to you. Want to Upgrade?

To: nic who wrote (19094)	11/2/1998 12:46:00 PM
From: Greg Hull	Read Replies (1) \| Respond to of 29386

nic, <<they sell/cover so as to stay below their 5% ownership limit. They cover only as much as they need to achieve this in order to defer earning for tax reasons. If this is true, the size of the short position would be a leading indicator of reg-D conversion volume.>> Here's the part I don't understand: if they are near the 5% limit, some or all of these shares are not hedged. They have naked longs - for what purpose? We are comfortable (well, that might be too strong a term) with naked longs, but these guys are supposed to be more risk-adverse than we. I don't know much about tax deferral. I have heard that selling short does not defer tax liability from one year to the next. Please, someone informed on this subject talk to us. <<Do you think we'll see another effort by the reg-D guys to drive down the stock price this week, or perhaps next? Now that I have some idea of the mechanics behind this, I'm ready to absorb a few more shares in that event...>> I'm betting no, but I'm not staking any funds to that bet. I'd assess the odds at 2:1 against an effort to depress the price. I'm assuming no bad news in the next two weeks. If there is bad news the price might erode and if so the preferred shareholders might try to push the snow ball down the hill a little faster. Good luck on your decision, Greg