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Technology Stocks : Moderated Palm
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To: KevRupert who wrote (2)8/1/2000 4:50:32 AM
From: Don Pueblo  Read Replies (1) of 21
 
This deal was underwritten by Goldman Sachs and Morgan Stanley Dean Witter.

It was priced at 38 and opened the first day at 160. It went straight down.

Twenty three million shares of stock.

Straight down, from the moment it went public, straight down for almost three months.

Why do you think that would that happen? Why would two of the biggest underwriters on the planet price something at 30 and then open it at 160 and watch it go straight down for two months, down to 20? Why would that happen?

What possible explanation for that could there be for that? Do you suppose the two lead underwriters were short from the moment they opened the stock? How much money do you think they could have pulled out of the market if they were? The first day, it looks like maybe the average would be about 20 or 30 points per per share and it looks like about 20 million shares changed hands that day. That's a pretty good day, eh?? Half a billion dang dollars.

Plus commissions!!

IF they were short, where do you think they covered? And who did they borrow the stock from...their own clients? Were they telling their clients to buy the stock in April when it dipped below 30 so they could short more and cover in May and go long?

Where does all that money come from? Who lost it on the way down?

These darn brokerage firms, I tell ya. It just baffles me. I wish I understood this stuff better.
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