Far from me the idea of accusing you being biased but I guess you missed the National Post article entitled:
TREMORS GROW AS E-COMMERCE MOGULS WORRY THAT PROFIT DOES MATTER.
Written by Paul Kedrosky, assistant professor of business at U.B.C., the article makes an interesting point: "... most Internet stocks have crazily small floats... For example, eBay, the $7 billion king of online flea auctions, has 40 million shares outstanding, but only 3.5 million of those shares are actually traded. Most of the rest is subject to regulatory lock-up because of the company's recent public offering. The upshot has been that it takes very little interest in eBay's stock to make the price jump up like high-octane helium.
But these tiny floats are about to do some growing. Starting jan. 22, for example, almost 25 million shares of eBay stock came out of lock-up. Instead of almost 3.5 millions shares for ravenous on-line traders to fight over, there was suddenly the threat of 28 million or so crowding the place. While it might not completely satiate anyone, it would definitely take the edge off some of the hunger for eBay stock. And arguably, just the threat of all this new stock helped to take some of the buoyancy out of eBay's balloon this week.
Most of the on-line crowd have tiny floats, with big chunks of their stock subject to release from lock-up over the coming weeks and months. Will Broadcast.com, Entrust, Geocities, and the rest be able to keep their lovestruck investors happy when there is so much of themeselves to spread around? More likely is that all the new stock sloshing around the markets punch bowl will make investors more than a little stock drunk. And things are only going to get worse in the coming weeks. Because not only will floats grow at these Internet companies, the supply of stock for new public offerings is growing as fast as regulators can process the paperwork." |
