NASDAQ:UTSI what is going wrong this week?!? 3/10/04

Wondering if anyone has heard anything about UT StarComm (UTSI), which is heavily involved in Chinese telecom. The management is Taiwanese, and the company is headquartered in the U.S.

Over the past few days the stock has fallen very sharply, over 13%. I am wondering if there are any specific rumors out about the company, or if this is just because of the double hit from the U.S. market dropping and warnings about China’s economy being “overheated”.

You’re right. It has dropped a lot recently. The below chart shows UTSI v. NASDAQ over the past 5 days (i’ve noticed that if I attach a chart like this it is updated daily so that in 5 days the posted chart will be completely different). The bottom chart is for the past 3 mos. The markets as a whole have declined, but UTSI has declined even more (maybe to compensate for prior overexuberance?). A quick look didn’t reveal any news regarding UTSI. Maybe it’s time to buy.

I don’t know what exactly is happening in wireless broadband and 3G networks (in China) lately, but I think telecoms are an especially volatile industry and there are many arcane and technical issues that can have great significance. Have you searched for news regarding the company. . . and the industry? … _stocks_dc

perhaps this is related?

Jack, the general economic news is certainly affecting it (although IMHO it shouldn’t – the company is tied mostly to China’s economy, not the American economy), but if that were all, it would decline more or less inline with the rest, so I don’t think that’s all there is.

MT, thanks for the charts; I have to learn how to do that. :slight_smile: I don’t think it is overexuberance, since the company has a trailing P/E of 18 (forward of 14, assuming it meets estimates), compared to “notanumber” (negative earnings, so no P/E at all) for most of the telecoms. Growth is good too. The stock is now below where it was in June 2003, when I bought, and back then their earnings and prospects weren’t nearly as good as they are now.

UTSI was HEAVILY shorted when it was in the teens and low twenties, and there are some major players who – even after this week’s drop – are losing millions of dollars. Shorts will do just about anything to drive down a stock when they get in that position. A few months ago, a rumor got started that China Netcom, UTSI’s major customer, was pulling out of deals with them. Totally false, but it knocked the stock down by several dollars for a couple of weeks. So mostly, I’m wondering if the shorts went out and started another rumor campaign to drive it down again – or if there really is some problem this time.

Finally found something – it turns out that a “newsletter” called “Off the Record” has claimed that UTSI has lost ridiculous amounts of market share. However, the “newsletter” never contacted the company, and is the same one which claimed a few months ago that UTSI’s main customer had dumped UTSI – of course, the customer hadn’t.

In other words, it’s more bullshit games from the shorts, who got buried when UTSI doubled after they shorted 8,000,000-plus shares in the teens and low twenties.

UTSI got hammered in premarket and aftermarket, but was strongly up on nearly double its average volume today. It tailed off at the end as the market sold off (terrorism fears), but still closed up sixty cents (2%) back above 30.

I bought calls just before the close yesterday; if I’d flipped them this morning, I could have made a 20% profit within an hour of the opening bell today. But I’m going to wait and see if UTSI breaks 35 before the end of May. :stuck_out_tongue:

Buy ZA shares and dump anything in US#!