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NCI Building Systems Inc. Message Board

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  • robertat40 robertat40 Oct 20, 2009 4:12 PM Flag

    my guess is ncs will be pulled back to $1.5-$1.75

    I have to disagree with "everyone was already aware of the conversion price".

    I see it all the time! Traders react to the news as it's released, and usually not rationally. A typical example is ACAS announced a $1.00 plus dividend a few months ago when it was trading for around $3.00 a share, and the stock went up 25% that day. Most people buying thought it would be a cash dividend, but it was actually being paid in new shares.

    In NCS's case, the conversion price was set low and the perceived value has been set for now, and with many holders seeing the writing on the wall they set stops which i'm sure the MM is taking out.

    I personally haven't followed the short interest from month to month, but i'm pretty sure the old shorts are waiting till the price drops near it's conversion price before covering, and I really can't see new shorts entering now because the potential short squeeze situation could be very painful if the short interest is still really high.

    Why try to catch a falling knife! Wait to see where it stops and once it has set it's base make your move.


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