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Technology Stocks : UBID - an IPO spinoff of Creative Computers
UBID 3.0000.0%Jan 21 4:00 PM EST
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To: jjs_ynot who wrote ()12/25/1998 2:36:00 PM
From: Steve Lin   of 581
 
Small Float and Shortability

Another reason for Ubid's recent rapid rise, imho, is the small float and no shorting pressure. When the crowd bids this stock, thinking it will be the next ebay, it will shoot up because there is not enough to go around. This situation spells volatility because if the selling pressure prevails, the price can break down rapidly - as rapidly as it went up.

At the same time, UBid's rise is unimpeded by shorters who think this stock doesn't have the funadmentals and isn't worth $1.6 billion. IPO stocks aren't shortable until the 26th day after. So the selling pressure will increase which will add to the volatility.

In addition, there is usually a "flipping" restriction on people who got in on the ipo. They are encouraged to hold on to the ipo shares for 30-days. If they sell before then, their broker will not let them in on other ipos in the future. The selling pressure will also increase because of this.

Please examine the situation closely and come to your own conclusion. Don't base your investment decisions on other people's exuberance. And always make sure you can afford to lose the money when you buy speculative stocks.

warmest wishes to all,
steve
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