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

To: unclewest who wrote (22351)	6/11/1999 9:13:00 AM
From: Matrix_Man	Respond to of 93625

Unclewest, It seems it would not cause a ripple. The shares could simply not be loaned out from the cash account. I don't think that speaks anything as to where they come from. Remember, ALL shares traded in the market are REAL shares, not 'phantom' shares. So the person that shorts real shares, which are borrowed, must buy real shares to return them to the owner. However, if the original owner who had them in a margin account moves them to a cash account - there is your ripple. Those shares must now be found to borrow from another margin account or MUST BE COVERED. If you are short, and your broker cannot find the shares to borrow, he will AUTOMATICALLY cover you at the market price. That is how you get a really hard short squeeze. It is all supply and demand. If these are in balance, the price will not change. Now, of course, market makers on NASDAQ or specialists on the NYSE can have a big influence on the real or perceived supply and demand so there is always price fluctuation around the true balance point. Fascinating subject. FTR, very long RMBS.