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Riverstone Networks, Inc. (RSTN) Message Board

  • hammertimee hammertimee Aug 3, 2001 1:14 PM Flag

    Good company bad timing!!!

    RSTN going to single digits sooner then i thought. Diluation will kill RSTN PE and book value will be way to high once all the shares are out. RSTN stock price should settle down to $8. That would be the approiate price rite now. Good comapny but bad time to spin off.. How is my 5000 shares short at $16 looking???????????????? $8 would be a double.. profit 40K. I'll take it......

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    • >>>"How is my 5000 shares short at $16 looking???????????????? $8 would be a double.. profit 40K. I'll take it...... "<<<

      I bought 10,000 shares at $8 & $7. Sold 5000 shares at $22 and holding 5,000 share. Even at today's price, those shares have nearly doubled in value.

      If you want me to remind you how much smarter I am than you, daily, recommend this post. In the maintime, I strongly recommend you stay short until after the first of the year, because I think this stock will drop well below $8 by then.

      N

    • You, sir, are an idiot...If you think distribution will affect PE or book value, you need some remedial finance classes. Total shares outstanding do not change with the distribution, only who owns them. Learn to spell, too.

    • hammertimee.

      <Diluation will kill RSTN PE and book value will be way to high once all the shares are out.>

      There will be NO dilution (of shares, book value, P/E or anything else) on August 6. All the per-share numbers will stay the same, only the SUPPLY of shares on the open market for trading purposes will increase - transferred from CS to people and funds who will trade it.
      There will be NO new shares issued, which constitutes dilution and affects all per-share ratios.

      <How is my 5000 shares short at $16 looking???????????????? $8 would be a double.. profit 40K.>

      Depends on how you count... :~) Double means a profit of 100%. Shorting can only give you a hundred percent profit if stock price goes to zero. $80K put at risk, $40K profit gives you 50% (not 100%) profit. Mathematically, shorting can only give you 100% profit, but unlimited loss. Mathematically, going long, you can only lose 100% of your investment, but give unlimited gain.

      <I'll take it......>

      Congratulations....

    • <RSTN going to single digits sooner then i thought. Diluation will kill RSTN PE and book value will be way to high once all the shares are out. RSTN stock price should settle down to $8. That would be the approiate price rite now. Good comapny but bad time to spin off.. How is my 5000 shares short at $16 looking???????????????? $8 would be a double.. profit 40K. I'll take it...... >

      Huh? Dilution? If I were you I would refrain from inappropriate accounting analysis.

      RSTN will go down because of temporal liquidity. When buyers know there are lots more sellers they drive prices down by withholding order flow. Henceforth look at why the premium on the PUTS are lower than the premium on the CALLS.

      Regardless, in securities markets unlike real goods markets, these equilibrium's are quickly reinstated. I think within a week or sooooo the prices will be back in the 17.5 to 20 range.

      Buyers and sellers will declare a truce and realize the fundamental value of RSTN is not as you say in the single digits.

      IMHO, you better cover your short dear friend.

    • You are probably right ....

      bad timing...

      looks like shorts will only make money

      so happy shorting.

 

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