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.

Technology Stocks : Creative Computers(MALL) -- Ignore unavailable to you. Want to Upgrade?

To: drakes353 who wrote (1126)	12/4/1998 4:54:00 PM
From: Tom Hua	Respond to of 1634

One thing that might argue for a persistant discount even after UBID is widely shortable is the mismatch in the number of UBID shares availble (1.5 million) versus the number of MALL shares available (10.whatever). drakes353, the arbitrage picture I envision is different. If a discount exists after 30 days then for each share of UBID shorted, the arbitrageur must buy 1.4 shares of MALL (ie., 1/0.72). There are 4.1 MM MALL shares in the float, up to 2.9 MM shares will be bought for arbitrage purposes, leaving only 30% of MALL float, or 1.2 MM shares, for non-arbitrage trading. Therefore the mismatch is not as large, effecting in a much smaller discount than was the case today. Regards, Tom

To: drakes353 who wrote (1126)	12/4/1998 5:00:00 PM
From: Dave	Read Replies (1) \| Respond to of 1634

Call me over optimistic, but the internets and MALL have got to bounce in the coming weeks. This correction has been huge, high valuations not withstanding and at some point people will buy back in. There has been a significant increase in the amount of people covering their shorts or wondering if they should buy back in on the internets on the threads today. I didn't notice that a few days ago, so the tide could be turning a bit here. FWIW, Dave

To: drakes353 who wrote (1126)	12/4/1998 5:05:00 PM
From: Tom Hua	Respond to of 1634

"well, the only way to short UBID at the moment is to short MALL" drakes353, this is exactly what a certain person on this thread was saying about 2 weeks ago (Wasn't that you Christian? <g>). But with the huge discount today, it would not be a smart move. Basically, if UBID drops 50% by the distribution date, the net gain for shorting MALL today will be ZERO. Please see my later post. Regards, Tom