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Technology Stocks : WDC/Sandisk Corporation -- Ignore unavailable to you. Want to Upgrade?

To: jkb who wrote (1803)	11/24/1997 5:49:00 PM
From: OrionX	Read Replies (1) \| Respond to of 60323

All, Two points: 1. Re: Jeromes findings - great work! Whom ever said that analysts don't have any effect on a stock please line up against the back wall with all the bullet holes! 2. Was today's 1/2 million shares traded an effect of the Asian flu with small investors selling into the hands of larger ones or was the increased volume as per daily average attributed to the fact that anything below $28 (the secondary pricing) will bring in the vultures for bargain shopping? Regards, Mauro.

To: jkb who wrote (1803)	11/24/1997 5:53:00 PM
From: Mike Winn	Respond to of 60323

I don't have a lot of experience yet with the mechanics of a secondary and I am still learning, but the behavior of this stock in this stormy market is a good one to watch. My perception is that the underwriters, in order to maintain good relation with the company and their investors, will do the best to support the stock price. Let assume that Sandisk told the underwriters to sell the 3 million shares at no less than $27/share. So if the price drops to less than $27, the underwriters cannot sell those shares from Sandisk, therefore they won't make any money. Remember the underwriters got the shares from Sandisk at a discount to the retail price. I see that all day long, there seems to be more sells than buys, yet the price doesn't drop as fast as under normal circumtances. The spread between bid and ask is very narrow, 1/16 to 3/16. I assume that the trades at the bid price could very well be buy orders, since the underwriters still have a lot of shares in their inventory and don't have to get on the market. If tomorrow, the stock market tanks and this stock drops less than the general market, then I assume that the underwriters "eat" all the shares that people sell in order to maintain the stock price. But if the selling is too severe, then at some point the underwriters will no longer afford to "eat" more shares and will have to let the stock go with the market. In a couple of hours, the Japanese market will open and we will know the reaction to the bank failure. Today is holiday in Japan and their market is closed. Any input is welcome as I am still learning.