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 Labs (CREAF) -- Ignore unavailable to you. Want to Upgrade?

To: Justin Pressley who wrote (13473)	2/1/1999 7:17:00 PM
From: Gopher Broke	Read Replies (2) \| Respond to of 13925

Let's face facts. CREAF are buying back with the "long term" viewpoint. Their objective is not to spend money supporting the stock price but to increase the EPS by reducing the float and cause the share price to rise naturally as a result of that. If so then they are going to buy back the 10% of the company permitted over the next year using as little cash as they can. Following this strategy you would not expect them to provide any support until the stock had bottomed. Then they will pick all the low hanging fruit they can until the stock returns to a "reasonable value". Question now is what is a reasonable value.

To: Justin Pressley who wrote (13473)	2/1/1999 7:38:00 PM
From: Gopher Broke	Read Replies (1) \| Respond to of 13925

Flat revenues for next quarter is good isn't it? The main thing that I don't understand about this latest selloff is that it seems to be related to CREAF's guidance for the next quarter, which was that quarter on quarter revenues would be flat. And I believe the most pessimistic of the analysts says that revenues might be down 15%. But revenues for the next quarter were expected to be down - they were down 39% a year ago, from 0.79 to 0.48. I calculate that down 15% on 0.64 is 0.54 which would be 0.03 over the last Zack's estimate (made pre-earnings). And that is without the buyback effect which would push the EPS up to about 0.56. Alternatively, a flat revenue plus buyback effect would put earnings to about 0.67, a clear 0.13 over Zack's estimate for the quarter. So this kind of outlook should already have been built into the share price? (I sure thought it was!) Can someone please tell me what I am misunderstanding here.