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: sylvester80 who wrote (54968)	9/24/2000 3:55:32 PM
From: Don Green	Read Replies (1) \| Respond to of 93625

Sly> It has nothing to do with any SI upgrades. Rambus volume fell right after the 4:1 split. The SI average volume figure at the bottom of the screen is correct. Right after the 4:1 split, RMBS volume declined. The only thing that I can come up with, is that the 4 times bigger float, got rid of all the day traders that were trading the stock multiple times a day (10-20 times) and had created all the volatility and much higher volume. Nice try, but no cigar, actually I would say the day traders are the main trade these days. If you watch the time / sales data intra-day and the number of trades made it is obvious that most trading is in 100-1000 share lots. It is nearly all day trading, very few large block trades. I do wonder at times which side of the Rambus debate twists the true more, longs or shorts. Don

To: sylvester80 who wrote (54968)	9/24/2000 5:26:20 PM
From: Bilow	Respond to of 93625

Hi sylvester80; Re: "The only thing that I can come up with, is that the 4 times bigger float, got rid of all the day traders that were trading the stock multiple times a day (10-20 times) and had created all the volatility and much higher volume." This is exactly correct. Daytraders have to shave profits out of the spread. Their costs are fixed (except for SEC fees and margin maintenance costs), in terms of cents per share. So when a stock gets split, especially 4 to 1, it is going to reduce the daytrading gross profits, but the fixed costs stay the same. The net profits are a lot less, and the daytraders exit for better fields elsewhere. One of the effects of this is to increase the number of shares available for long term shorting, in that when daytraders go short, they have to borrow shares that cannot also be borrowed by a more long term bear. Rambus fought off this effect by suppressing important PRs until after the split. -- Carl