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Technology Stocks : MRV Communications (MRVC) opinions? -- Ignore unavailable to you. Want to Upgrade?

To: Sector Investor who wrote (11280)	11/26/1998 11:25:00 PM
From: WebDrone	Read Replies (1) \| Respond to of 42804

Hi Sector, here is a guess on shorting from the convertible- Why cover now? The convertible is still paying a nice dividend, the short insures against losses should the company going under, and those who shorted from $24 will be in the black for quite some time! There is still a chance for many bad things to happen... good things, too. Um, here's a question- The company issued this debt in a hurry and a tangle- what was the rush? What did the company need the money for, and what will we all think when the company spends the money on whatever they intended when they issued the debt? Happy turkey day, from one of the turkeys, Web

To: Sector Investor who wrote (11280)	11/27/1998 11:57:00 AM
From: Bruce L	Read Replies (2) \| Respond to of 42804

<The short interest is still pretty high...I guess I just can't understand high short interest on a stock trading at cash value with good forward looking prospects.> I can't understand "high" short interest either under the circumstances outlined, i.e. good forward looking prospects. I believe the answer may lie in the fact (actually my hypothesis) that the short interest is not "high." Let's assume that those people who did the convertible hedge were smart investors and did close their short positions near the stock's lows in September. How can we account for the fact that short interest is still almost 3 million in November? First, I think it can be attributed to the dollar decline in the value of MRVC's shares. I would think that sophisticated investors who short would do so in terms of fixed minimum DOLLAR amounts rather than fixed number of MRVC shares; cheaper MRVC share prices would lead to more shares shorted - for those investors who short. Second, average daily trading in MRVC has increased more than 60% from October to November, from 509K to 843K. While the short interest from October to November has decreased only slightly, the number of trading days to account for this short interest has decreased dramatically from 6.17 to 3.50 days. The increased trading from one month to the other can be accounted for (IMHO) by two factors. First, there has been considerable speculative discussion of MRVC on various stock bulletin boards. This has led to purchases by day traders - who not having the patience of the long termers on this thread - have bought and sold. Second, MRVC has had two recent trading ranges: initially 5 1/2 - 6 and more recently 6 3/4 - 7. It would have proven very profitable to buy and sell within these ranges and I believe many people have done just that. (To a very limited extent, I have myself.) Some of these traders have probably been shorting the stock also within these ranges. They have probably (again IMO) been covering quickly as the stock repeatedly rose and fell within the range, but these short term short sales have pushed up the monthly short interest figure for November (which I believe is calculated on an average daily basis). If I'm right, then the "high" short interest number for November would not be a matter of great concern.