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Microcap & Penny Stocks : CYCOMM (CYII)-on aquisition trail
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To: Brian Gross who wrote (833)11/21/1997 9:00:00 AM
From: Bullseye  Read Replies (2) of 1800
 
> My question is why didn't it go down with 30,000 shares sold in the
> last hour??

I don't know if anyone knows something about marketmaker screens ;
It shows a list of all marketmakers (nasdaq) or listed exchanges (amex/nyse) with their prices and bid/asksize

As Robert also indicated earlier, there was yesterday and today a
large bidsize at $2. eg:

exchange price bidsize price asksize
------- ----- ------- ------- -------
amex $2 253 2 3/16 18
pacific $2 53 2 1/4 24
chicago $2 24 2 1/4 10
otc $1 7/8 5 2 3/16 10

Very simply said : if somebody puts a sell order of (253+53+24)
33,000 shares, the bid will fall to $1 7/8 ; On the other hand : it
only takes 1800 shares to move the ask up to 2 1/4 .. this would leave
a spread of 1/4 and it's only a matter of little time before any of
the exchanges lift their bid to narrow the spread.

My reasoning : the chances for getting 1800 shares bought before
33,000 shares are sold are much greater. This could spark up the
price. This WAS true : the price did bounce , except for what we saw
yesterday at 3pm : that person was able to sell so much shares because
the exchanges had a very large bidsize which (due to the selling) has
been completely vanished.

Since the screen now indicates a combined bidsize of 27 (2700 shares)
untill 1 7/8 , any order in that range will automatically push the
price to that level ; any larger order will cause another downtick
untill support settles in.

This situation can go anywhere. New support could be established
through large bidsize at 1 3/4 or something like that. The exchanges
however tend to move prices lower if more selling orders hit the
floor. On the nasdaq such a situation tends to be more extreme than
amex, but on the other hand any news like cycomm getting a new order
or so pushes up the price on the nasdaq much higher, whereas on the
amex the shareholder still gets punished.

In conclusion : a combination of no liquidity and selling is capable
of destroying the stockprice. It's up to the management to take
necessary steps.

Take care,
Bullseye!
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