Avalon Group, Inc. Message Board

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Technology Stocks : Avalon Group, Inc.

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To: Author51 who wrote (586)	8/10/1998 1:06:00 AM
From: Eric Fader	of 1530

As has been repeated many times on this thread, the spread is basically irrelevant because the stock is not actively traded. The MMs do not want to keep an inventory of AVAL and sit with it, so they don't want to tempt any would-be seller with a decent bid. The only way they'll bid for it is if they have a real buyer, or if they've just sold it short to a buyer. (Like when someone bought a mere $4,000 worth of stock a week or so ago from 2 MMs who sold it short, and the spread went from .14/.24 to .20/.30 as they tried to cover.) Also, when there is someone who wants to buy shares at any given time by bidding through a MM, then too you'll see a bid that's not so ridiculous. The key is the offer. You'll almost never see an offer below .23-.24. The only way to accumulate a decent-sized position is to be willing either to sit on the bid forever in the .16-.18 range and hope someone just bails out and hits your bid, which happens rarely, or hit the mid-.20's offers and then bid a penny above the MM(s) trying to cover their new short positions at .19-.20. Trust me, I've been trying to defy these "rules" for months and have picked up virtually no cheap shares to add to my core stash.

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