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Technology Stocks : Primestar/TCI Satellite (TSATA)
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To: Jim S who wrote (241)1/22/1999 7:45:00 PM
From: Randall Thomas  Read Replies (1) of 442
 
<<Right. I understand that, Randall, but my point is that even though the shorted
shares may not actually exist, someone must be buying them. My question is, who?
>>

Obviously i don't know in this case....but this stock was HEAVILY sold in the high 2's wednesday and thursday (at times a firm would hold the stock for hour or more, and sherwood never let it through 3 wednesday)...I assume leakage tipped off people that the stock was going to be worth well less than 3, and would not at all be surprised if some of the selling that high was shorting...also this morning the inefficient pricing of the issue and understanding of the deal (it actually trading 2 3/4 quite a bit around 9 am) allowed people who saw this to take advantage and go short intraday (lehman was a huge seller this morning and would not let it up from high 1's to the low 1's)...both these are people who might be buying heavily at these levels since this may be fair pricing for the stock and they might as well cover their shorts. I am not sure if enough is known about exact terms for there to be an arbitrage trade here (or if it is trading at a premium to deal now), but if there is one arbitrageurs are an ever-present volume issue, long or short.

Just my thoughts....

randall
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