Monday, October 8, 2007

"derivative" plays

Wall Street loves talking about the next thing, so we always hear this internet stock could be the next Google, or this software company could be the next Microsoft and daytraders need a 15 second pitch to buy a stock, unless its under $15--then they just need 10 seconds. So with that as the background, here's some "derivative" plays.

Business Objects (BOBJ 50.26) got a cash takeover by SAP close to $60 bucks. (Where have all the midcap software stocks gone? Oh that's right, they've already been bought.) One that hasn't is BEA Systems (BEAS 14.01) a stock Ichan has bought a 13.2% stake. So that's the 10 second "derivative" play on SAP's buy.

The daytraders, are clamoring for China ideas. RCH (China Architectural), was floated at 3.5 and you could of had all you wanted at six, and a week later and it ran to 25, before coming back down to earth, and Agrfeed (FEED 12) popped 4 dollars on Friday. The 10 second derivative play for those that missed these? The Chinese SPAC's- Origin Agritech (SEED 7.69) which sells crop seeds in China, and Chardan South with common and warrants at 5 (CSCA and CSCAW 5.38).

CSCA is a SPAC that signed a deal to acquire Head Dragon, the owner of a controlling interest in GaoKe, the largest private Chinese engineering company for 13 million shares of stock. CSCA brings $32 million in cash and a publicly trading vehicle to the table, while GaoKe brings expertise in power generation and micro power networks, and $54 million in revenue for the last three months with $6 million in net income. If the deal closes, in the next couple of months as expected, it could rock. And that's the 10 second "derivative" play for China themed stock speculators.

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