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 : Bill Wexler's Profits of DOOM -- Ignore unavailable to you. Want to Upgrade?

To: Bill Wexler who wrote (4319)	1/30/1999 8:30:00 PM
From: david james	Read Replies (1) \| Respond to of 4634

I don't think the short squeeze is the only reason the stock will go up, but I do think it is one of the things that will attract new buyers. I also wouldn't argue that the company is without problems. Despite a big increase in revenues and what appears to be a big earnings increase, the company does have some serious cash flow problems. I believe that when Able acquired MFSNT, they had expected to have a secondary to pay off some of the debt, but when Asensio hammered the stock into the single digits, they made that unfeasible. And floorless convertible debs was bound to attract shorts. Although I followed it, I didn't buy until I saw that Fidelity bought 1 mill shares. But now the stock is rising, and at some point I would expect them to announce a secondary. Considering the institutional support they now have, it wouldn't surprise me if most, if not all of that is picked up by institutions. It would be a drop in the bucket for Fidelity and Vanguard that have already taken significant stakes. Last check there were under 11 mill shares outstanding. However, lets add a bunch more and make that 15 mill shares. They are expected to have $500 mill in revs in 1999. Lets be conservative and call that just $300 mill. At a price to sale of 1:1, ABTE needs to trade at $20. Other companies in the industry trade at much higher multiples. Dycom (DY) trades at price to sale of 2. WCOM trades at a price to sales of 8:1, and MFNX trades at a price to sales of 180:1. Now if you were shorting MFNX, I might go along with you. DJ