IDA,
>>Never heard that before, so Investor "A" goes out and buys 500,000 shares of Intel at 10% below market turns around and sells them for an
instant 10% gain. Then they do the same thing with stock A, then B,
and ect. I wonder why all the MF managers don't do that, basic math skills would tell you that they could make tons of money doing that.
Why don't they? Because companies don't sell their stock below market because that's admitting to everyone that your stock is over valued.<<
Au contraire! Companies DO sell the stock below market, EVERY DAY. Intel, IBM, and other companies currently offer employees stock at 15% off market value. Why? Not to admit that the stock is overpriced, but to reward the employees and encourage productivity for the company and, as a result, improve the value of the stock (theoretically).
The same can probably be said concerning why the secondary of IOMG was priced below market values for institutions...Iomega wanted to reward the institutions for taking a chance on the company. In addition, all of the institutions that bought some of the secondary will probably come out with BUY recommendations within the next few days (weeks) so as to further increase the value of IOMG stock.
Jay
LONG on IOMG |
