To: Pr-Ac Man who wrote (5233 ) 4/24/1998 12:30:00 AM From: James Harold Alton Read Replies (1) | Respond to of 19331
PA, Per your post: I also believe that there has been considerable selling pressure coming from up North. However, I'm increasingly less convinced that this is the "smoking gun". We have traded over 14 million shares since November when the selling pressure (where ever it's coming from) began, and if my memory serves me (which it doesn't always do) the last posted estimates of converted stock options were at about 3.5 million. Even if we assume that all of those shares were sold (which I doubt) and that there has been some shorting against restricted shares, we're still a long ways away from explaining the price and volume activity over the last few months. PA, If you have a better explanation/analysis to present I would like to hear it, and if you feel that there are holes in my analysis then feel free to point them out so we can discuss them..I don't have a problem with you not agreeing with all that I have posted. In responding to your concerns about the large number of shares that have been traded versus the number of shares I suspect have been sold out of Canada, consider the relative likelihood of those shares having been "absorbed" by dedicated long term holders of DCI. It's my opinion that most of the long term DCI holders, tend to be pretty well extended with their current investment in DCI and have not been able to absorb many of those shares..so who buys them? Short term flippers/momentum players? How long do these types tend to own a stock? I suspect that those 3 million + shares have traded hands many times since they have been sold (and they would only had to have changed hands once every 1.5 months approx. to equal the total volume figure you used) because those shares have not found a good "home" and this is part of the reason for an increased amount of volume over the past several months IMO. Joe explained to us where about 1 million of that volume came from, a group that had brought an aquisition to us that did not work out had bought about 500,000 shares prior to the offer and then sold when the deal didn't pan out. One of the reasons DCTC does not appear to be responding the "rules of supply and demand" is because we cannot see the "supply" side of the equation. In the most recent example NFSC has for several days been sitting on the ask pumping out shares and up until today has not been on the bid. That supply of shares that is being feed into us show up as trades at the ask which we see as "buys", only those are not shares that have been pulled out of the market at the bid, they are new (probably more CC shares) shares coming in. Until that overhead is either dried up, or we can legally stop the sale of those restriced shares, I don't think we are going to see much "normal" trading in DCTC IMO. Are we suffering from stock manipulation? Well I would sure call the sale of restricted stock, whether shorted against the box or sold outright a form of "manipulation". What can we do about it? Well we know that DCI has hired a law firm especially to deal with that problem, and hopefully they will be able to handle this for us. As a shareholder, I don't know if there is much we can do about stopping the selling. We can help by increasing our buying, I picked up 2K shares at $1.50 today, but I didn't notice a big change from that. (G) If you have other ideas, lets talk about them. I didn't say that there was no room left to short DCTC, but I did indicate that I felt that it would be illogical to do so from these levels as the risk/reward ratio is terrible for that type of play it would seem to me. Look at it from the shorters point of view, you have a $1.50 if you could go all of the way to 0 and a chance of having to rebuy some of your shares above $10 if Joe gets his way. (G) You would be going up against a cash rich company with a 5 million dollar buyback in place that could really make life as a shorter miserable for you..I just don't see it. The shorting of a company into the ground might work on a cash strapped company that was forced to issue it's own stock to stay afloat, but that certainly is not the case here. That's my thoughts on this. James