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Technology Stocks : THQ,Inc. (THQI)
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To: Mr. Aloha who wrote (12905)1/29/2000 4:00:00 PM
From: Dennis K. Showers  Read Replies (1) of 14266
 
These are my thoughts on the short attack on THQI and how it is so effective. We have approximately 18 million shares outstanding. Of that number 12 or 13 million are held by institutions. That leaves approximately 5 or 6 million that are traded or may be traded. The average volume is 566K. Since the Nasdaq counts both the shares bought and the shares sold to find the volume that means that 283K are bought and 283K are sold. Now when the buyers and the sellers are equal, the price stays the same.If the buyers out number the sellers, we go up and vice versa. Obviously. Now, with this small number of shares it is easy to see how when uncertainty enters the picture someone with deep pockets could begin to sell 2K, or 5K or 10K or 50K. Whatever it takes to push the price down. Add to that an over bought condition and the downward direction begins to gain momentum as the stops begin to kick in. It seems to me that if the timing was right the number of shares sold would not have to be that great. Remember that in an average day only 283K shares change hands.

This probably seems very elementary to most but there are always questions of how this stellar stock can go down. I think that is the reason. The same is true in the reverse. One wealthy buyer can easily consume all of the available shares. I think they add to the overbought conditions. But how else do they accumulate? That's why the large funds stay away from micro caps. If they change their position they raise havoc with the stock price.

Whitetail
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