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 : Wind River going up, up, up! -- Ignore unavailable to you. Want to Upgrade?

To: bob who wrote (4676)	4/7/1999 11:31:00 AM
From: Bargain Hunter	Read Replies (2) \| Respond to of 10309

It is time to change my screen name from Bargain Hunter to Bargain Hunted. I formally declare WIND a bona fide bargain. I have been nibbling a little on the way down. I just backed up the U-haul. Based on what I have seen, I have come to believe that the recent decline in price is based on several factors: 1. a lot of WIND investors appear to be retail buyers who bought for the wrong reasons (stock was going up, they were in Pathfinder etc). Those who were on margin were vulnerable to the change in margin requirements for WIND and other stocks rated as "volatile". 2. as pointed out by Mark Brophy, the stock price surpassed the exercise price for the convertibles, making arbitrage plays possible. I don't know whether any such plays actually took place, but the possibility can encourage people who play with enough money to move markets to modify their trading tactics. 3. a enormous amount of doubt was created by the CSFB analyst who lowered his estimates in January with comments about back-end loading. 4. the WIND announcement that was intended to calm the market after the analysts comments was interpreted as an earnings warning by some people. 5. the timing of the stock split created some confusion because earnings estimates needed to be adjusted and some people probably compared post-split earnings with pre-split forecasts. 6. many funds will not buy stocks in a quarter during which they decline significantly. 7. some funds have minimum market cap requirements for buying stocks. WIND's market cap decisively broke down below $1B. That may also trigger selling by some funds whose sell discipline includes a minimum cap for keeping a stock. 8. the fear and uncertainty created by the downdraft makes individuals and funds nervous about buying because they think someone knows something they don't. Everyone is waiting for others to create a turnaround before they leap in. It might take a few good earnings reports to get that started. 9. fear about competition from MSFT. Strangely, people seem more worried about embedded NT than WinCE which is closer to WIND's primary business area, although the overlap today is relatively small. Embedded NT should be more of a concern to QNX than WIND. Also, I think people should get nervous about MSFT's earnings if MSFT pushes hard on embedded. PCs based on embedded WinCE could undermine the market for Win 98. I cannot be sure that the market will not push WIND down lower. If you haven't heard or read Warren Buffet on the subject of "Mr Market", you should. Mr. Market is offering us a wonderful bargain today. He might offer us a better bargain in the next few months in which case I, for one, will buy more unless some new facts emerge. What little we have heard from WIND management sounds like they are trying to reassure us that there is no fundamental problem with the company. I believe that they are very sensitive to the possibility of lawsuits. They need to be very careful about what they say, yet I believe that what they have said would leave them open to a huge lawsuit if they were misleading us. I don't think they are that stupid.