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Technology Stocks : AUTOHOME, Inc -- Ignore unavailable to you. Want to Upgrade?

To: Benkea who wrote (7081)	3/29/1999 4:12:00 AM
From: KW Wingman	Respond to of 29970

<<Anywho, it sounds like the arb play is not so ridiculous after all.>> Soon after the deal was announced, I sold most of my ATHM and bought XCIT. I did not short ATHM for a few reasons. 1)I felt the deal was good for ATHM and XCIT 2)If I would have shorted it I lose any upside potential. This is the BIG risk because I want to own the stock. 3)I felt that shorting ATHM was taking on extra risk. When the deal was announced, ATHM initially fell and then resumed climbing. I sold ATHM at about 110 and immediately bought XCIT about 90. If the deal is cancelled, I figure I can hold XCIT and wait for it's recovery. They are both very high growth companies. On their own I feel that both stocks would go higher eventually (within a year or two). I figure Grace is correct in how XCIT would fall if the deal was called off. I also figure ATHM will go in the opposite direction, especially when you consider the shorts will be scrambling to cover. I would not want to be short ATHM if the deal was called off. Valued - by what standard. I do not think ATHM is over valued. I used to think that way about AMZN, complaining how over valued it was. I then shorted AMZN at 88 a few splits ago <:{ Then I was long and short at the same time and tried to trade it. This wised me up a little. I will not stand in the tracks and try to stop a moving freight train anymore. AMZN value has nothing to do with standard value measurements like PE. It is valued on expectations, like AMZN has a prime piece of real estate at the mall or at least the market thinks it does. If you are short I would suggest you cover ahead of the closing because when the arb shorts cover ATHM may run up. There is a large increase in the short position in ATHM. I suspect much of it is from people trying to capture the difference. Anyway I am bullish on ATHM so I am not going to short it when I see it moving up day after day. The arb deal looked riskier to me than just buying XCIT and waiting for the deal to close. So far, I am about 50 more points correct on my choice. I am a gambler, I know I may loose that 50 points tomorrow (the odds are against it). What the heck, easy come, easy go,no risk, no reward. I'd rather invest in something the old timers call overvalued rather than parking my money in t-bills or yesteryears stock. <:} Regards, Wingman