Bought Calls on GIGM

Since February I have owned and written calls on Gigamedia GIGM. Recently the stock has taken a serious tumble, losing about 1/3 of its value. This is a very profitable and growing company and I see no reason for the price fall except market fears and the current pull back in both the U.S. and Taiwan markets.

The company has an earnings release scheduled for next Tuesday, August 14. Today I bought some Sept $10 calls for $.95. An earnings surprise to the upside should give a nice boost to the stock price.

Projected earnings are $14 per share for the 2nd quarter. Last year the company earned $.18 in the second quarter, while projections then were only a nickel.

For a profitable growing company the stock price of Gigamedia has taken way too much abuse. IMO!

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