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Technology Stocks : WavePhore (WAVO)- VBI fed WaveTop for WebTV
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To: InvestorTim who wrote (978)3/7/1998 9:35:00 PM
From: AJ Berger  Read Replies (1) of 2843
 
How Short Covering Catapulted WAVO

Tim, a million shares in short position mean they have to BUY stock at market price in order to RETURN it to the shareholders who lent their shares to those who sold them short. A short squeeze can be even more dramatic when not only are short cover's forced to buy stock at any price, but when shareholders SELL their stock into the updraft and FORCE the shares short to be covered in order the the shares to be returned for shareholders to SELL. This occurs much more often with small cap, small float stocks like this one. Try to learn more about how a Short (bet that a stock price will go down) actually can be profitable, and you'll better understand what I mean.

As for Friday's action, it's pretty clear that MSFT+BUY+WAVO all in a press release simply attracted brand new buyers. All on this thread knew better already. We may see some carryover on Monday, but I'm certain the profit takers will step in as soon as the volume dies down below 200,000 shares per day. That would be a good time to take profits for those looking for short term gains, or to trim down their positions. So if you're new to this stock, I don't suggest chasing it up. You'll get another chance to buy once the volume dies down.
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