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Technology Stocks : Son of SAN - Storage Networking Technologies

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To: George Dawson who wrote (1192)	4/28/1999 9:13:00 PM
From: Kerry Lee	Read Replies (1) of 4808

The recipe for successful IPO is usually that IPO common stock offering is only 10-15% of the total shares outstanding, which makes the "float" small and leads to corresponding astronomical market caps. When every tech fund wants in on "Hot Company B" ( eg BRCM )and there are only 2-3 million shares freely trading, that creates the huge demand and price appreciation. When the 180 day lock-up periods end is when the "float" increases as insiders/VC's are allowed to sell their shres on the open market.Herb Greenberg of the Street.com made a big deal last year when the lock-up period for Broadcom (BRCM) expired and he predicted that the stock price would take a huge hit as insiders would flood the market with their shares..BRCM is still trading much higher today than before the lock-up period ended. ps - astute day traders/momentum traders look for stocks that have small float/large short interest ( eg "The Whiz Kid )and the result is you see gravity-defying run-ups like what occurred last year on KTEL when the shorts get squeezed.

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