so not to add fuel to the buyout rumors, but a $35-$40 price makes sense for a buyout
When EMC acquired RSA (most comparable 2 factor co) in 2006, they paid EV/REV of about 6.75. This multiple applied to VDSI = ~$38, or a pretty significant discount to where the shares trade today. (LTM at 12/31)
at the time, the financial press said RSA had a choice to keep going down its questionable path of small acquisitions or capitulate and sell out. it seems a very similar situation is in play here: KH, full of hubris, mumbles, and protective of his baby, doesn't give two shytes about retail longs, who may or may not have discovered his company last week. however, the lower the shares go, the higher the buyout premium for what he ultimately wants.
however, as hairy has rightly pointed out, the savvy fund (read inside traders) who *know* far more than those posting and reading on here, would not be taking the short trade to such an extreme if a buyout was imminent. they're just not that stupid
so i'm confounded. i think patience is the right answer, the problem is i can't afford to stay in this forever, particularly if it keeps tanking.
Thank you for your observations. I tend to agree with you on your first point, short interest being viewed as a bullish sign by retail investors. However, you can't dispute that such a large short position, for whatever reason, makes the underlying susceptible to high volatility to the up- and downsides.
yeah...i've noticed that as well. i've been following this stock since 2008 and have been in and out since. made relatively good money last year on the run-up, have lost a bit on this recent decline. 12 months ago this board was empty except for a few postings here and there. would love to do a study on posting frequency (capturing sentiment if possible) against SP movement
i've been reading your earlier posts and you have been spot on. i wish i had listened to you earlier! i guess there's a reason they say "hope is not a strategy"
"People do not leave unless there is a big problem behind the scenes."
hmmm....maybe they had outstanding revenue growth and he was given a better comp package by a competitor? or maybe you're right, maybe the big problem is their crummy balance sheet. it's probably that.
"After I saw on the conference that there CFO is exiting"
the guy is like 73
unfortunately you guys don't have the same perspective on this company, or its management, as some other folks on this board.
longs, stay patient. you will be rewarded with excess returns.
i like how there can be two seemingly successful and intelligent people at the exact opposite ends of the opinion spectrum on this one
while i think longs will prevail long-term in this stock, how did you screen for taking the position you did? it was obviously an excellent short term move and i commend you, but i haven't seen you on this board before. what mechanism did you use to spot the short entry? truly asking for my own edification