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To: Apakhabar who wrote (808)	8/27/2000 3:43:24 PM
From: Dan Duchardt	Respond to of 1426

Apakhabar, I don't understand why all these MMs, knowing "full well" that demand far exceeded supply, would keep selling at 15 just to fill the orders, knowing the only way to get the stock back cheaper would be to buy it from panicky retail investors. Would you assume that you could panic the public to sell enough shares not only to you but also to some other MMs? Would I assume I could panic the public? Yeah, I would. I am the public, and I have far more often than I would care to admit been fooled into action I later regretted. Why? Because my knowledge is always limited, and price action and volume are sometimes the only indicators I have that something has gone wrong. For all I know when price makes a dramatic move some event that I will not find out about for several minutes or hours has caused it. Somebody ALWAYS knows before the public at large and is taking advantage of their early access to information. Distinguishing the difference between an event driven move and a large, "random" market fluctuation in real time is not something I have mastered. It may never be possible. I should add that (assuming my theory holds) it's not just the momentary panic that serves the interest of the MMs trying to rebuild inventory. Once the panic ends because buyers step up to the plate, regaining the levels the prevailed prior to the panic is often a long process during which there is plenty of opportunity to absorb stock at profitable levels. We all can see that in general prices fall faster than they climb. As far as keep selling at 15 just to fill the orders is concerned, we can't know how much demand there was for the stock when it ran up from 13 to 15.5 under institutional accumulation. Maybe the demand was for 10 million shares, but the MMs were not going to go that far at that price, maybe at no price. Who knows what negotiations took place? Conversations like: "I want want 500K shares at 15 or better?" "I can't do that. I can get you 200K." You'll have to pay higher for more" "Alright, get me 200K" may have been going on several times that day. But I think it's safe to say that MMs must do everything they can to satisfy the institutions when they come calling. Turning them away will send them calling somebody else, the firms with whom they might compete 99.9% of they time even if they do informally form temporary alliances to induce the public into action. I expect they must and often do draw the line somewhere, but if they never take a risk they will be out of business. Dan