CYCOMM (CYII)-on aquisition trail Message Board

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Microcap & Penny Stocks : CYCOMM (CYII)-on aquisition trail

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To: Bullseye who wrote (836)	11/21/1997 4:45:00 PM
From: Robert Morrison	Read Replies (1) of 1800

Bulleye. Your post sums the situation up perfectly.... "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." Because the bid and price didn't really get below $2 today there obviously must be someone supporting the stock at $2 regardless of the weakness of the market. You would think with the absence of other buyers, someone buying large blocks of stock would have been sitting there all day today at $1 7/8th's not $2. $2 is a very important number for Cycomm. (1)Before the 1/5 reverse split in October 1995 it traded below $2 and stayed there. Apparently the American Exchange advised them to get the price back over $2 or it would be de-listed hence the capital restructure which of course took the price from around $2 to $10. In pre-reverse split terms the stock is now trading at 40 cents. (2)$2 is the regulatory margin limit, trade below this and all margins are called...this leads to an avalanche of selling by brokers closing out clients and of course the stock price then moves into a $1 to $2 trading range. (3)Insiders bought at $2 before so this is the floor price for management's valuation of the stock. My guess is there must be some insider buying going on at $2 or some well-informed institution is soaking up stock at the floor price. Your points about no liquidity and the effect of announcements brings back the same old issue of "where is the news that will give this stock a market". The market is all about perception. You could de-list Cycomm, rename it and put it back on the market with an opening price of $20 per share and the price would go $24 or you can leave it where it is and let the stock settle into a trading range of $2 to $3. Let's face it, most investors look at the stock price first before fundamentals and assess the stock on the price above all else. For example, if most people saw Microsoft listed as a 10 cent stock they wouldn't even look at it even if it was earning $10 per share. Even if they saw it was earning $10 per share they would think "something must be wrong with this company otherwise the stock wouldn't be 10 cents". In other words they let the market value the stock for them. What this means is that if management lets the stock price continue to fall without trying to support it with any kind of announcements what are we goint to get on a good announcement...the price goes to $4 not $30. Cycomm has been so under-hyped that management must know the only way they can get the stock up is through earnings which is a long tedious exercise because the company's capital base won't allow it to go to $100M in revenues overnight. If the stock had been hyped to $20 then raising more capital for inventories would be easy because, again, a $20 stock must be worth something Rob Rob

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