[CrackMonkey] tennis anyone?

[Deirdre Saoirse]

On Tue, 1 Feb 2000, Bob Bernstein wrote:

> "Trust me -- nobody loves Red Hat more than I do. The problem is that
> approximately 121,159,408 shares of the company are becoming eligible
> for sale in a week. The chart tells me the rest of what I need to know."
> 
> Comments, rebukes, excoriations, exultations?

It's well-known that right after the lockup period ends is often bargain
basement time for buyers. In fact, it's not such a bad time for insiders
either. Consider the following strategy:

You buy shares at $.12 and the IPO price is $10. It goes up to $30. You
sell at $20 when the lockup period ends. You've realized those gains. The
sales depress the market, so you buy the shares back at $18.... You have
some added profit, but the downside is that you have tax in a given year.
Because of the peculiarities of AMT vs. regular income tax, you can do a
fair amount of effectively tax-free trading in that year though.

Rule of thumb: wait until after the bottom starts turning back up before
buying. To find out whose lock up periods are ending, see: www.ipo.com

-- 
_Deirdre   *   http://www.linuxcabal.net   *   http://www.deirdre.net
"Mars has been a tough target" -- Peter G. Neumann, Risks Digest Moderator
"That's because the Martians keep shooting things down." -- Harlan Rosenthal
<Harlan.Rosenthal at Dialogic.com>, retorting in Risks Digest 20.60