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Technology Stocks : Rambus (RMBS) - Eagle or Penguin -- Ignore unavailable to you. Want to Upgrade?

To: George the Greek who wrote (22338)	6/10/1999 7:24:00 PM
From: unclewest	Read Replies (1) \| Respond to of 93625

hi george, i was suggesting that there may be limited shares available to cover. not to short. i guess all of the shares could be shorted either through a broker or by the share owner if they are in a cash account. including the institutional shares. btw. a long time thread member just said this in an e-mail to me. I still feel amazed that common folks like us have a good shot at becoming really wealthy, just by holding stocks in these good technology companies. As some trader said (on a good day) "Is this a beautiful country or what?" Yes, it is.

To: George the Greek who wrote (22338)	6/10/1999 10:05:00 PM
From: Matrix_Man	Read Replies (2) \| Respond to of 93625

George, Your are right that shares held by a broker are available for lending for shorting purposes, but only if they are in a margin account. Shares held in a cash account cannot be lent for shorting. I believe this is SEC rules. Frankly, although I have tremendous respect for Unclewest, his hard work and his sharing his info with the rest of us, that is one area which I do not agree with him on. The fact is, it does not make too much difference whether the institutional shares are available for shorting or not. If most of the rest of the shares are available, then there is a virtually unlimited supply, until they are mostly in cash accounts. You see, if I buy 100 shares in a margin account, they could be lent to the next guy to short, to another guy who buys them into his margin account where they are again available for shorting. My 100 shares can turn into many hundred's of shares until they wind up in cash accounts, where they become unavailable. Now this does require a nice balance between the bulls and the bears, and lots of them on both sides. So theoretically, the number of shares short is unlimited. As a corollary, heavy shorting need not send the price of a stock down as long as buyers are available, likewise, short covering need not send the price up, as long as sellers are available. I was asked on the Yahoo! thread (which I have stopped reading incidentally) how all these 'phantom' shares could be covered. They are covered in the usual way, buying them in the market. Remember, no matter what, shares are ALWAYS available, at some price, in the market. Therefore, a squeeze has two important components: short covering, often forced due to margin requirements, AND a lack of sellers. At some price, the shares WILL be available and if the short covering pushes the price up a little, there will be those that are long that will sell. I have to say, although I am a long term committed holder of RMBS, if the price was squeezed up to 200 tomorrow, I would sell. Mostly because I know it would settle back down. Is it possible to squeeze up that high - I think not. So I shall continue to hold till '05 or '10 or something like that. Longer if they have another trick up their sleeve! Well, enough of that!