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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: Roads End who wrote (17210)	2/11/1998 4:15:00 PM
From: Eddie Kim	Read Replies (2) \| Respond to of 97611

Riechers, I read the story and it doesn't seem very informative to me. In fact it's very misleading. Fidelity bought 6 million shares at an average price of $36. Thus if Goldman Sachs sold them 2 million then they are short that amount. Notice however that CPQ then traded at 34 3/8 to roughly 35 7/8 the next two days. Plenty of time for Sachs to buy back its 2 million shares at a lower price; thus making money on the trade. What this article is talking about is frontrunning Golden Sachs. If you're an insider you know the deal has already gone down, and you know Sachs NEEDS to buy 2 million shares. If the price of CPQ continues to go up, then Sachs is screwed because they have to buy back the 2 million at a higher price then they sold it. Thus in turn making CPQ go up even higher. The article makes it sound as if this happened...i.e., Big Fidelity buying another 4 million shares from ML and thus screwing Sachs. But this did not happen with CPQ. It conveniatly sat in a range of 34-36 after the Fidelity purchase. What my friend told me about was that Fidelity and Sachs (and probably ML) were basically scratching each others back. And from how CPQ has been trading it certaintly appears that way. He said to expect some more big buys from Fidelity in the near future (maybe it happened today). This is how they do business. They figure they might as well screw the small investor who sells...like us.