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JNI Corporation (JNIC) Message Board

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  • runlong_1999 runlong_1999 Nov 19, 1999 5:35 PM Flag

    Big D Dog

    There are a whole lot of you out there hootin'
    and hollerin' about the end of the quiet period on
    Monday. But you need a dose of reality.

    Now don't
    get me wrong. I am long this stock and will be for
    awhile. I like the company, I like the
    industry.

    But I do not believe Monday will see some huge jump
    on coverage initiation. QP's simply don't have that
    kind of effect, contrary to popular opinion. Yes,
    there are some exceptions, but look at the last few
    months worth of IPO's and you'll see that QP's ending
    and coverage initiations don't have a monumental
    impact on the stock. Why?

    First, strong buys are
    not common on initial coverage of recent IPO's.
    Brokerage houses do not like to come out with strong buys
    right away because then they cannot upgrade
    later.

    Second, everybody expects the underwriters to come out
    with buys. That is standard. As such, that "news" is
    almost completely discounted.

    I'm saying all this
    not to rain on the parade but because I don't want
    weak handed "longs" to run for the door if the stock
    does not have a big jump on
    Monday/Tuesday.

    This stock will go higher. But it will do so on
    fundamentals and the strength of the industry. Not on the
    biased coverage initiation by the underwriter who has an
    economic stake in the company.

    Good luck.