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Chapter 7 - The Secondary, February 3 - March 28, 2000 - Episode 8

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On March 9, 2000 the NASDAQ reaches its all-time high and closes above 5000 for the first time ever. The close above 5000 makes a little news but all-time highs are now routine. NASDAQ set a new high three trading days before and the day before that and the day before that. On March 10, NASDAQ trades above 5000 all day and makes another (yawn) all-time high.

On Monday, March 13, the NASDAQ is down more than 100 points although it shows some strength late in the day On March 14, the NASDAQ closes back down below 4800.

"A needed correction," the analysts say, "after such a long run-up." It is generally agreed that this is a buying opportunity as the market "consolidates its gains".

hackoff.com stock is down with the market, and on March 15 closes at 110 3/16 while the NASDAQ itself descends though 4600. Larry complains about how much less money the company and he and Louise will raise in the secondary, but is reasonably sanguine as he notes that antihack is down about the same percentage as hackoff.

By March 23, the NASAQ has, as everyone knew it would, recovered to near the 5000 level. Predictions for when it will go through 6000 are fashionable and range from one to ten months. Only the most dour pessimists think it will take a full ten months to get to the next milestone. By March 23, antihack is also trading near its all time highs again. But hackoff.com closes below 100 for the first time since it climbed through the century mark on January 11. It is now off more than thirty-five percent from its high.

"Y'all's stock is behavin' like a whipped puppy," says the man whose Stetson is hanging from the back of his office door. It's 3:00 PM in Fort Worth and the market has just closed in New York. He shows Larry and Donna the closing quote on the big screen on his desk.

"It trails the market, some," says Larry. "Its strength is the great portfolio we've got, so people overreact a little when NASDAQ is down and it takes a few days for them to get their confidence back. This is a great buying opportunity and the secondary makes it even better; you can pick up a sizable position without moving the price up. Once NASDAQ is clearly on its feet, the stock's gonna be happier than a hound dog with two pricks, trust me."

"How is y'all's bizness doin'? You gonna show an operatin' profit this quarter?"
"I'm glad you asked that," says Larry. "Everyone asks us about the stock price and forgets about the business. We're doing fine. Got some real good stuff in the pipeline, too. And we've been making some money when portfolio companies get acquired even though we haven't actively been selling."

"But what about operatin' profits? Y'all gonna have some?"

"That's what they say," says Donna. "Analysts are predicting that hackoff will start being profitable this quarter."

"They're sayin' y'all are goin' to have an operatin' profit this quarter; not just a profit from sellin' some stock?"

"That's right," says Donna. "That's the guidance. Of course, we can't comment on that."

"‘Course not, ‘course not," says the man. On his coffee table, there is a genuine Remington of a mountain lion sinking its teeth into the shoulder of a stag. Horns from another stag are above the door on which the Stetson hangs. The coat hook is a brass replica of deer horns. "But, are y'all ‘comfortable' with what the analysts say about your profits?  I mean your operatin' profits, not what y'all make sellin' stock."

Donna hesitates and the man looks less sleepy.

"We talk to them all the time," says Larry.  "We're always talking to the analysts. They have a good handle on what we're doing."

"So they should know what their talkin' about when they say y'all are gonna have an operatin' profit?"

"They should," says Larry.

"Ma'am, is there something you're uncomfortable with?" the man asks Donna.

"I'm very comfortable," says Donna and smiles full dimple. "Great office you've got. Lots of horns. Did you kill some of them yourself?"

"Shaw did," he says. "You comfortable with those analyst numbers?"

"I'm the one who talks to the analysts," says Donna.

"But are you comfortable with what they say?"

"Shaw am," says Donna promptly.  "I am."

"Okay. So long as we understand each other," the man says. "Now why don't y'all show me those slides you got?"

"He's not as dumb as he looks," Larry says to Donna afterwards.

"No," says Donna, "but at least he didn't say anything about a dog with two pricks or whatever that was. Where did you get that?"

"I don't know," says Larry. "Someone from West Virginia said it, I think.  Just wanted to talk to him in a language he'd understand."

"Sounded pretty dumb coming from you."

"Your hesitation didn't help," says Larry. "This may be Texas but he picked that up in a New York minute. What are you nervous about? You know we're going to have a profit this quarter."

"I AM nervous," says Donna. "We SHOULD have an operating profit. We sure as hell guided the analysts that way and I wouldn't have done that if I didn't think it was a slam dunk. But the sales figures didn't look great in February. We're still on track but the numbers are soft. Are you ‘shaw' we're gonna have an operatin' profit?"

"Let's get ‘shaw'," says Larry. "I'll have Marcele set up a call with Frank for us tonight."

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"This may be Texas but he picked that up in a New York minute." I don't believe that anyone would say that. The rest of the dialog works for me, but that line... no.

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