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To: mst2000 who wrote (904)	8/28/1999 4:55:00 PM
From: Scoobah	Read Replies (1) \| Respond to of 1438

When you say ATG, do you mean ATEG?

To: mst2000 who wrote (904)	8/28/1999 9:02:00 PM
From: Bilow	Read Replies (1) \| Respond to of 1438

Hi mst2000; Regarding: 2. I do not think shorting per se affects the price of a stock, because borrowing shares on margin does not increase "supply" - what causes the price of a stock to go down is poor financial performance, bad news, failure to meet deadlines, and other matters that give rise to selling pressure. I agree that bad financial performance drops a stock, but that is certainly not the only thing. Very few traders would doubt that increasing the supply also reduces the stock price (read any economics book for the supply/demand curve), and it is obvious that shorting increases the supply of a stock, and therefore will drop the price. I suppose one could argue that the stock's price will not change in terms of fundamental concepts like total return of dividends and earnings and that sort of thing, but not very many traders actually use those concepts. Instead, people decide that they want to have 100 shares of "linux", for instance, and buy RHAT at whatever price. The total amount of available stock is the float plus the amount shorted. One of the things that I have noticed is that stupid story stocks tend to reach their peaks at about the time that the float gets up to 50% or so of the total outstanding. After that point, it becomes more and more difficult to corner the market, and the stock price drops. Sorry to bust in on the conversation, I don't follow the issue you guys are talking about, so I don't have anything to say about it, just on the influence of short selling, or more particularly, a sudden increase in the amount of shares sold short. -- Carl

To: mst2000 who wrote (904)	8/29/1999 1:30:00 AM
From: Gerald Walls	Read Replies (3) \| Respond to of 1438

Thanks for your response. I appreciate the opportunity to discuss this on technical and non-technical terms. A few responses: There's really not a whole lot to discuss. You're long and your mind is made up. I have no position and don't plan on taking one. In six months we'll know the truth. And the notion that Rose Glen will engage in such manipulations to the potential detriment (indeed, possible ruination) of its own investment, and at the risk of getting caught, sued and its reputation destroyed, is in my view more than convoluted - ridiculous is the adjective I would use. If fear of getting caught would eliminate fraud and boarderline legal acts, then why do I read about telemarketers fleecing little old ladies all the time? Why do we need people in your field of work (JD)? 2. I do not think shorting per se affects the price of a stock, because borrowing shares on margin does not increase "supply" Let's say that 10,000 shares of a stock exists and is owned by the public. I borrow 1,000 and sell it to someone else. The public now owns 11,000 shares. That 1,000 shares is actually owned twice is immaterial except in terms of voting those shares. For instance, if the stock pays a dividend all 11,000 shares pay the dividend. I say that the supply increased. 3. That anybody would base a decision on whether to invest in a company on the "hostility" meter of an internet thread is pretty scary. Well, tell that to Greenberg (mailto:herg@thestreet.com). Ask him about the hostility of the Iridiots, the Stewpids, the IDT-iots: "Iridiot" is slang for Iridium (IRID:Nasdaq) investors whose hostility sent this column's Hostile React-O-Meter careening when I first questioned back in May whether the news on Iridium was about to go from bad to worse. Iridium initially slid into the mid-single digits before bouncing back three weeks ago into the midteens. The stock's rise caused Iridiots to come out of the woodwork, including one who asked: "Are you ready to eat your last negative words about Iridium??? Have you seen what it's doing lately? Looks pretty green to me in them thar hills, stars, whatever!!" (That prompted the headline: "Iridium's Stock Is Back, and So Are the Iridiots.") And, better yet, from that same issue of his column: Calling all cults: After reading this column's back-and-forth with IDT investors, California clinical psychologist Jerome Silverman wrote that he believes it's clear the IDT-iots "reflect an additional classic behavioral principle. This has to do with external support for one's pathological condition. If an individual with pathological ideation is surrounded by people who challenge the pathological position there will be a reasonable probability that the position will be re-evaluated, rejected and a healthier one put in place. "However if the pathological position has external supports -- people who similarly hold that position -- there is often very little chance to have that position re-evaluated, let alone having it modified in a healthier way. "This is why cults are so powerful an influence on their members. It seems that for many buying a stock is similar to joining a cult. Instead of being investors -- open, alert, considering all information concerning their holding -- they become cultists, cheering the stock in spite of negative data and wanting to kill the messenger who brought it. "They find cult mates on Internet message boards and in a kind of ritualistic behavior, post wishful predictions like 'up 10% by next month' or 'big takeover coming.' These posts have nothing to do with fact, but by posting them the action itself serves to reassure them and other cultists that all is well and that they have done something in the service of the cult -- e.g. the post and prediction. "This is similar to primitive peoples who during a drought do a rain dance. It gives them something to do to validate their beliefs and it reaffirms the cultist hope." Which is where the "springs eternal" comes in.