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Technology Stocks : Novellus
NVLS 2.400+2.1%Jul 24 5:00 PM EST
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To: Steve Fancy who wrote (2242)5/20/1999 9:32:00 AM
From: Carl R.  Read Replies (3) of 3813
 
Actually one of the curious things about SI is that some stocks that are very thinly traded have active threads (e.g. PROG with an average volume of about 15,000 shares/day and about 5 posts/day), and other stocks are very actively traded and have almost no posts (CDN with about 4 million shares/day trades and about 4 posts/month.

As for dilution, that really only applies when the stock tries to move above the secondary price. Below the secondary, the newly issued shares are backed up by cash. Furthermore to the extent that the cash earns 4%, there are earnings that support the PE of 25. To me its more of a supply-demand question. As the supply of stock increases it takes a little while to find permanent homes for it, resulting in a temporary supply-demand imbalance, and driving the stock down temporarily. The question I can't figure out is why anyone would buy a secondary....

Carl
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