To be forced to pay well above the IPO price just five weeks earlier, CSCO must have felt they needed Arrowpoint awfully bad. Alternatively, if Cisco is anywhere near right in the value it paid, Arrowpoint should be preparing a lawsuit against its underwriters. Throughout the course of our writings, we have always contended that the public specifically does not buy the dips. They buy the recoveries. This has been shown time and again over the last few years.
Nothing is left to interpretation.
As we have mentioned to you over the last few weeks, the public did put money to work in April. We were quite surprised. If they bought the dip, then this was completely out of character for the public relative to past behavior. In the spirit of full disclosure, we have lifted the data for the following table straight from Bob Adler's AMG Data website. What this implies to us is that the public was not eagerly buying the dip at all.