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Biotech / Medical : Zonagen (zona) - good buy? -- Ignore unavailable to you. Want to Upgrade?

To: Linda Kaplan who wrote (2810)	3/18/1998 4:21:00 PM
From: Bill Wexler	Read Replies (4) \| Respond to of 7041

Basically, its when a large percentage of the float is controlled by the insiders of a company or a few large investors. A short squeeze can be generated by the large investor shifting his stock into a margin account so it can be lent out. After a while, the investor may shift the stock back into a cash account forcing a fast call-in of shares. Sometimes a few insiders will trade the stock back and forth amongst themselves simultaneoulsy bumping the offer a little with each trade. This brings in momentum and SOES traders, raising the price even more. The purpose of this game is to ultimately attract small retail customers - who are usually left holding the bag when its over. One very interesting method of generating a short squeeze and simultaneously "dumping" the stock is to move a large block to margin as I described above, and then selling small portions of the stock. This forces a simultaneous call-in of shares and artificially supports the price for a short period of time. The speed of the rise and dump depends on several factors including the size of the tradeable float, number of market makers, the liquidity of the stock, and to a lesser extent - general market conditions. One clue that a stock is rigged is if it's easy to borrow at the retail level. If after a few days or weeks the stock begins rising on no news (or like Zonagen - despite bad news), and shares suddenly become unavailable, then its a pretty safe bet that a short squeeze is in effect.