Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Zeev Hed who wrote (43095)	5/27/2000 4:20:00 PM
From: The Prophet	Respond to of 93625

Thanks, Zeev. While I believe you are right 99% of the time, this time you are mistaken. The average volume is irrelevant - what matters is the number of unique shares actually changing hands. RMBS has 23.9 million outstanding shares. Of these, 8.3 million are owned by insiders, so I would exclude them from the shares generally available during a squeeze. That leaves the float at 15.6 million. Of these, 11.2 million are owned by institutions. Although some of these shares would be sold at the right price during a squeeze, many of them are in portfolios that are not actively traded. So, excluding these shares, and mindful that some of them would be available for the shorts to cover with, that leaves 4.4 million shares freely available to trade. The fact that this number is nearly equal to the number of shares short, and the fact that RMBS seems to often revert back to a "pivot" position a day or two after a big move in either direction, suggests to me that most of the daily volume is occupied by day traders trading the same shares over and over. As you recall, during the short squeeze, even small amounts of buying with a small float pushed the stock dramatically. This will happen again, though, as I indicated, not quite as viciously because the ratio of shares short to available shares is a little better now. Please let me know if you feel my reasoning is flawed. Prophet