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Technology Stocks : WavePhore (WAVO)- VBI fed WaveTop for WebTV -- Ignore unavailable to you. Want to Upgrade?

To: MrLuckyman who wrote (2368)	12/9/1998 10:08:00 AM
From: Thomas G. Busillo	Respond to of 2843

MrLuckyman, I didn't see the interview, but if this is the best counsel has to go on: Shares started to fall following Cramer's statements, which included: (1) characterizing certain Internet companies as "Fraud-U-Net" companies (2) regarding his attempts to "short" WavePhore stock prior to the interview (3) that "Greenspan doesn't like WavePhore going up." Maybe management wins points in some camps for standing up for his company, but as for a legal cause of action - cert. denied. 1. I'd note that the writer use the term "certain Internet companies" in (1) and yet in (2) and (3) use the company name. Having not seen the interview, I would assume that this means that Cramer did not make a specific reference to the company, that it was more a general comment on some of the non-first-tier internet plays. I'd argue the term itself--"Fraud-U-Net"--is a euphemism, clearly not referring to legal fraud, but more a general term suggesting that when you get down to the meat (the steak) of some companies in the sector, you end up with a lot of baloney (the sizzle). I have no opinion on the "steak" v. "sizzle" in regards to WAVO. 2. He "attempted" to "short" or he was short? He's a hedge fund manager and he does short stocks, yet he's repeatedly stated he was not in fact holding a position. Where is the nexus? 3. I'd argue that the literal meaning is so far from reality (the idea that Allan Greenspan is not only aware of a company called WavePhore and the fact that it's stock is appreciating, but also has taken a personal dislike), so preposterous, that it can only be construed as what it reasonably seems to be - a humorous way to comment on the possibility of the Federal Reserve monitoring for speculative excess in the general markets. I think a reasonable person would agree that the internet sector is an area where there has been some speculative excess. Also, the comments were addressed to an audience who were reasonably likely not to take the phrase literally. Looking over mh's response, those were fair questions and the individual has refused to return. If he felt what Cramer said was so damaging, he had an opportunity to give a very aggressive rebuttal on live television. In fact, he's been given a second chance to do so and has apparently refused. If I had to make the decision, I wouldn't have given him a second chance either, because what it boils down to is "a hedge-fund manager expressed skepticism; we failed to effectively rebut any lingering skepticism in a live interview; our share price went down; we want a second chance." I'd also note that the PR fails to mention the fact that prior to a member of WAVO's upper management team failing to successfully rebut skepticism when given the chance the stock had nearly tripled on the heels of several PR's. IMHO, this is relevant. This wasn't the case of a sleepy little company suddenly getting pounded after a high-profile individual gave an opinion. I'd submit that the very reason upper management was appearing on CNBC that morning had to do with recent news and share price activity (the stock had nearly doubled the previous day on 32 million shares). I'd also note that the company's PR response apparently did not come until 4:25 p.m. 12/3/98 - two full trading sessions after the event. I'm not a lawyer, but if a "cocktail party lawyer" such as myself can begin arguing the other side, I'd think the real deal can and will do so much more eloquently and intelligently and will ultimately prevail. So speaking as someone attempting to be objective and someone having never held a position either way in the stock, I'm more disturbed by what I would interpret as a company's attempt to scapegoat a money manager after their shares succumbed to profit-taking after a news event-driven run. People have a right to express their anger. If I was a shareholder, I'd be unhappy as well. Surprising disclaimer: I like Cramer and TSC, I think they both have very worthwhile insights; when reason tells me differently I write to them. The only thing I will say by way of constructive criticism is that sometimes one doesn't always have to have the amp cranked up "to eleven". Good trading, Tom