mymeohmoneyblog

well wasnt thinking i was gonna post again this soon but my position in GTW went up about 50% today on news its being bought out by taiwan's Acer. the price was in the 1.20s and the deal is for 1.90 to close around december. stock up to 1.80. i'm selling of course, not worrying about the last 10 cents, and will put the funds elsewhere sometime later. gtw's position in my s.l.o. port rose from about 5% to 7 %, for a ~ 20k gain. Not much considering the move on the issue, but appreciated nonetheless.

just checked and while gtw is up 50% today, my port overall is only up about 2% for the day, talk about dilution!
well at least that puts me above 10 n.a.v., at least for awhile, should the matadors tire us down this weak.

i wonder if i would of tried my hand on this issue had i not been playing the strat-lab, with my personal dough parked into more defensive issues like pdc. gtw has been one of the hundreds of issues on my watch list for the last coupla years. i certainly have noticed how it tanked recently down to the 1.2 level when just previously this year it had been a somewhat viable trading issue at the 2 dollar psych level. it had been fighting its way upward along with the rest of the market since last fall. i just checked the insider trading on it and apparently some guy named Theodore Waitt has been selling hundreds of thousands of shares on it Every several days for several months now ( or longer) - perhaps just planned sales but nontheless probably not too helfpul for the share prices (couldnt/shouldnt he of just sold his stake to someone awhile ago? - instead of depressing the price? (hurting himself as well?)). Well anyhow a drop from 2 to 1.2, not too far above BV ~ .70, plus bouncing around the same rev and ea #'s for the last few years should of given one more confidence in price support somewhere down there in the low 1dollar level. (vascillating between penny ea losses and gains qtr to qtr).

No doubt insider fear had something to do with the timing of this b.o. If you saw your shares plumment from 2 to 1.2 in a downtrending stock from a high 7ish a few years ago might'nt you have wanted to lock in some 2 +/- action as well? Personally, i probably would have made some changes, and sold the co next year when the stock was in the 2 to 3's for a premium in the 3 to 4s. its a sad story perhaps, and one has to wonder about management. this was a company there with dell in the beginning. when/while dell sold online, gtw tried to go the stand-alone brick and mortar route. Now that dell has/will begin selling directecly as well via WMT, one has to wonder why gtw didnt come out with some major announcement of vending deals as suppliers/major-suppliers at (wmt?...) major discount chains as well (TGT, kmart stores, etc., ....). In essence, it seems as though they've always chosen To Run from the competition. they tried to go the high end high price route, but in a market where prices are always coming down, save for certain aps / gaming/serving etc. Now dell e.g. can sell the higher end models, because they gottem in cheap first (think cars industry). gtw tried (think wished) to just price 'em high and hope people think they're better. on a personal note, i dont know why anyone would've ever bought a gateway anyways. i went into their brick and mortar store in downer's grove illinois a coupla years ago and they wanted like a thousand bucks a piece. it's one of those times when where you sort of hold your laughter/suprise/shock and just act polite/interested until you get out of the store and away from the salespeople. likewise here on campus at the university of iowa they offer gateway special student pricing, and the sticker is like 7, 8 hundred, thou, thousand 2, 15hundred etc, and you're just like wt_ r they thinking? who would ever buy something like this? why would anyone pay more for something that isn't essentially any differnent than something else? everyone knows you can go online and get a decent comp for 500bucks (+/- 200) from dell or ebay etc.. that's the bottom line now, and probably not going too much lower, low enders for 300ish etc.. Gatweway made it to the end, and sold out just as prices couldnt really get too much lower in years to come. guess there looking at margins and the competition? well as i said earlier, you'd think if they'd just compete. Look for Acer to go a good job of integrating gtw, at least a lot better than Lenovo(what! - ('who')) has with IBM. Acer in my experience has some low end model rep and also some gaming rep, though admittedly not that well known by the general populous. Taiwanese historocultural relatioexperience with the west helps them moreso than mainland china's lenovo. ideally, gtw and acer gain synergies and marketing/vendor avs and gain market share. they should probably brand a new model as well ('ought to') for the US. gtw bought emachines a few years ago ( the only brand i'd even considered buying, at BBY, based on price/components), which promptly began to lose significance thereafter, geez. What a failure; even now i could have gotten more. (meaning management - 6mo to 2 years time) Oh well, hats off to them for finally doing something .

p.s. i have many thoughts about asset weighting; wish the algorithms were a little stiffer on this. Have no doubt i could 'win' this lab if that was the main focus. At any time i could overload an issue? Is this true/possible? Have seen several ports with weighting over 25% to any one stock, and the only cost?? - delay in an 'M' rating? - if that's even what one wants/knows about? I follow lots of dollar stocks that could rise like gtw, and even moreso in a 6 month timeframe, and even moreso after the end of a tumultuos correction like this. Are there more rules/database-comp-server-programming rules being/gonna be put into place for this/SLO? p.p.s. here are my two previous comments re GTW :

august 15th Just Blogging... "Incidentally i'd like to get out of GTW whenever i can; i overlooked the fact that these small caps take a too-big commish bite, much moreso than in real life (why?)."

AND

august 13th First Trades... "GTW (beaten down big lately, more to fall? but maybe 1-1.2-1.7ish-2 psychological hold, future b.o. target? christmas coming, alterations to sales models and/or pricing? has got some name recognition cant anyone make it work? management should sell out if given the chance)"

Comments: View Comments |  Monday August 27, 2007