ps -- to the person who made the utterly ridiculous claim that institutions are major holders of this stock, i give you the below -- btw, in the real world, in the print WSJ -- they listed amzn, yahoo, and 2 other stocks and showed the top market makers -- all otc or small shops -- no major firm wants to do much with it and noted that virtually all the orders were under 1000 shares -- the hallmark of retail investors.
How 'Day Traders,' Computers
Created a Web Stock Frenzy
By REBECCA BUCKMAN
Staff Reporter of THE WALL STREET JOURNAL
The Friday after Thanksgiving is traditionally a lazy day for most of Wall
Street. But this year, it was a day of frenzied market action for
Internet-company stocks.
In that single day's trading, shares of Web
auctioneer Onsale Inc. shot up nearly 63%.
Books-A-Million Inc., a little-known
Alabama company that last week unveiled a
jazzed-up Internet bookselling site, saw its shares more than triple. And
stock of tiny Connect Inc., which makes systems that help Web sites offer
online shopping, more than quadrupled, from $1.375 to $6.125.
The source of the market jolt wasn't big institutional investors, most of
whom generally take the day off. Instead, increasing evidence suggests the
stocks were bid up that day, as they have been throughout much of the past
month, by hyperactive individual investors trading online themselves.
This breed of amateur -- and semiprofessional -- investors, also known as
"day traders," quickly move in and out of stocks, rarely holding positions for
more than a few days. It's probably no coincidence that the stocks most
swept up by this kind of online trading -- based on momentum, tiny nuggets
of news, or rumors on Internet message boards -- are Internet stocks
themselves.
"I believe beyond a doubt that retail [or small]
investors, specifically online traders, play a
major role in moving these stocks ... We're
talking about day-traders," says Bill Burnham,
an electronic-commerce analyst with Credit
Suisse First Boston Corp. "I have on my
screen all these [companies] that literally have
been comatose for months who have sprung to life in the past few weeks,
and I guarantee it's because of chat on the Internet and retail traders."
Indeed, on Monday, a discussion group called "INTERNET MANIA! Day
Trading Net Stocks," was the most often-visited section of Silicon Investor,
a popular Web site devoted to technology stocks. By Wednesday, the chat
board, started only last Friday, was clogged with 731 messages.
Raising Questions
The excitable trading raises clear questions about whether the new, risky
trading style, employed by investors ranging from retired businesspeople to
college students, poses dangers for some investors and brokerage firms.
Earlier this week, the Nasdaq Stock Market created a new task force
under its Quality of Markets Committee to discuss the recent spike in
volatility in many stocks, including Internet issues. The committee is
expected to identify reasons for the trend in the next few days and look for
possible solutions in coming weeks, a Nasdaq spokesman said.
interactive.wsj.com |
