Great questions 1-Day-Trader
Despite my sleep deprivation, I could not help but respond. Please forgive me.
1. See my last post to Auric - on a $50 stock, the savings to an institution at 8-12 basis points is .04 to .06, so that the B/D charge costs the trader one cent, while the VTS charge saves the trader between 2.5 and 4.5 cents per share. I urge each of you to read the PHLX paper -- it is not BS, believe me. Draw your own conclusions.
2. Please remember that ATG's IPO went from 4.50 to 15.50 in a day. You could model earnings for this company over a two year period at well in excess of $3.00-4.00 per share based on VTS and its iterations alone. I agree that the rise from 2 to 14 took me by surprise, but only because we have been at sub-2 so long and it happened so quickly. This stock is a little like a coiled spring. It's main "product" is hitting the market at the very moment that ATS systems are the new rage. That may be contributing to this, but I do not necessarily expect common sense to deflate that given what we now know about the tech sector stocks generally. Just my opinion. My original price target in 1996 was $30 per share over a 1-2 year period, with the thought that there was a lot of additional upside potential that could also be realized. SEC delays could have put the company into insolvency were it not for Fred Rittereiser's financial connections (remember, his brother is CEO at Grunthal), and those delays certainly crushed the stock for a long time (enabling swine like me to assemble much larger positions than our relative wealth would have suggested possible, I might add). Now it is like (as some other poster said) a drug company whose long suffering but very important experimental drug has just received FDA approval. Until VTS goes live, this is nothing more than speculation by the mostly uninformed, including me. In fact, 2 3/4 years of delay has allowed every Tom, Dick and Harry whose sights were off the beaten track enough that they settled in on ATG to debate the very questions that still "rage": i.e., will it be a success or is it all hype. In 60 days we find out. But from my perspective, the stock is now almost back to where I first bought in, not some penny stock flying to unnatural highs. And the numbers in the models I work off of are reality based, even if there is no "historical" data to prove them out. We shall see!
3. If you accept the earnings models, and consider the upside potential of eMC and Gomez, $13 is not a bad entry. But I'll admit, I am not as enthusiastic at 13 as I was at 3 or 6.50 (duh). Most TA's seem to think the chart is technically safer now than it was 5 weeks ago when this run was first starting, but I am no TA. My first shares were bought for $14.50. Maybe that makes it easier for me to stomach. And if I thought it were overvalued now, I would be an idiot not to sell at least some of my position, which I haven't and which I guess answers the question. But make no mistake, until a few quarters of revenue and volumes history have elapsed, this is and will remain a speculative development stage company. But it is very well timed - even a weak hitting shortstop hits a homer when the pitcher hangs a curve. Timing is everything, not only for traders, but for all of us. And I would be very hesitant to short this in the face of the current discussions between the NYSE and the PHLX, or between now and July 1. You might make a few dollars here and there, for sure, but you may get your clock cleaned. Risk/Reward issue to be sure.
4. I have been giving a lot of thought to that (what my target is). I would probably put some stops in if the stock gets over 30-40, probably in $2-3 gaps and in 10% increments, beginning 25% below the price, especially on my IRA shares. I HATE paying $$$ to the IRS. And I will probably have to sell the warrants in the next 45 days, because, IMHO, they will be called ASAP. If so, that may well take a big chunk of my downside risk out altogether.
5. I think a market correction, whether caused by interest rates or otherwise, will hurt all equities because high P/E ratios will not be as tolerable in a stagnant economy. On the other hand, ATG will actually benefit from a sell off, because index funds and other similar process driven traders will be looking to reduce their execution costs as they liquidate and juggle portfolios in order to make cash distributions. I'd prefer a continued strong economy, and concede that few stocks will fare well under the circumstaces you describe.
I do not think either the dilution that has been referenced in other recent posts here, or the Form 144's for that matter, are all that significant for reasons I will be happy to address elsewhere. And if ATG ever falls from 154 to 132 in my lifetime, I can assure that I will be giggling . . . well up to a point. And I am not a buyer of NITE even at 132, though it continues to defy gravity, even after today.
Thanks for the questions - they were very appropriate. I will think of a few for you soon, OK?
MST |
