To: Chip Anderson who wrote (5284 ) 7/13/1998 9:27:00 PM From: Joe C. Read Replies (1) | Respond to
Chip, You're right about the volume today, almost 1 million shares and only ONE block trade at 10,000 shares. All the semi's did very well today and seemed like TDFX went along for the ride except there was maybe one difference: TDFX has a huge short position. My guess is that day traders started buying at the open (probably based on friday's strength, relative industry strength and earnings coming up) and when it seemed it wasn't going to stop, some shorts may have started covering. My guess is that it was probably more momentum than short covering. I agree that size is important to watch for because it clues us into institutional activity. However, don't forget that 2 million share short position. A large part of that is probably retail (if not MM) since few funds go short and those that do tend to stay in the liquid stocks. 2,000,000 shares short is like 160 trades for 25,000 shares each being flipped at the bid and ask. That's one mighty large institution that is already committed to buy at some point in time. I wonder what will happen if some of the big boys decide to nibble based on: 1) being a "legitimate" small cap since now in Rusell 2000 2) another record for revenues and strong quarterly growth 3) realization that graphic chip market should be differentiated and requires higher multiple (e.g. 17-20) 4) OEM announcement showing significant entry into mainstream market 5) Christmas time industry strength coupled with mainstream ad campaign and TDFX only release of hot new must have games. Anyway, I'm getting a little ahead of myself. This week should be interesting. Joe C.
