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Technology Stocks : Information Architects (IARC): E-Commerce & EIP

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To: TEDennis who wrote (676)7/3/1997 1:44:00 PM
From: Dwight E. Karlsen   of 10786
 
TED, why would you conclude that today's move was manipulation? I've read some very in-depth posts from people who shed a lot of light on what all the market forces are that come into play in thinly traded stocks that also have few market makers. One particular lesson costed me $800 in DDIM losses. ALYD historically doesn't move up except on news. However, that's obviously changing, and ALYD is becoming more volatile.

One explanation for today's move up on no news: The MM's (anyone know how many MM's ALYD has?) want to be sure to have a decent supply of inventory to sell to the public during the next news-related move. For this senario, the MM's believe that the most likely direction of the stock is up. Right now, the MM's can buy the stock at the current levels on the open market (effectively from other MM's). But during "the next" wave of public buying, if the MM's start running out of stock to sell, they will have to buy at presumably higher levels in order to continue selling the stock to the public. So, today's move could have come from MM's accumulating the stock to sell at higher prices down the road.

I believe that on balance, a steady rise in stock price over time reflects a continued public desire to own the stock.

Dwight
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