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Microcap & Penny Stocks : NEOTHERAPEUTICS (NEOT) (NEOTW) -- Ignore unavailable to you. Want to Upgrade?

To: Tradegod who wrote (391)	5/21/1998 6:17:00 PM
From: Lorenzo Perez	Read Replies (2) \| Respond to of 705

To all: I shorted this stock yesterday and covered today, predicting a retraction as most of Biotech stocks have done the last few days (ONXX, TTNP, TGEN, ENMD, MATK, and others). But in no case I would hold my short position after today. This is a stock with average volume around 25k and just 3.90 million floating shares. Yesterday's run-up reached 121 %. Many, many traders shorted this stock. And MM know that. Squeeze will come for sure, tomorrow or the day after tomorrow, as many brokers can short a stock without actually borrowing it. But they have to cover before 72 hours. The squeeze of further run-up has nothing to do with the actual news or the real value of the stock. It si just a situation created by a big hype and a small float of shares.That's exactly with happened with KTEL. Does this stock really deserves its price? Of course not, and many people shorted it on this bases, forgetting it had just about a million of floating shares (adding some that management would sell on the run-up). Those with enough money and experience decided to squeeze the shorts by placing buying orders that pushed KTEL higher. Shorters refused to cover, convinced that it was hyped. But price continued up and up, as demand for the stock increased. Than -panic. Those who shorted without actually borrowing KTEL had to cover it on time, which also increased the demand for more shares and pushed the stock even higher. You know the rest of the story. Shorting a stock is a very tuff game, specially those with small number of floating shares. On the long run, hyped stocks will go down: KTEL, ENMD... But the problemm is that nobody can predict how higher they will go before they come back to their right price. The problem than is in your pocket and pacience. People with a lot of money can wait as long as it take for the stock to come down and cover. But those with limit cash in their accounts face the risk of getting a margin call or their short position being covered by their brokers. At least, don't forget that the maximum amount of money we can make shorting a stock is just 100% in case it goes to zero (bancarropcy). But the amount of money we can lose is as high as the stock can go -infinite math. Sorry for this long post, Regards