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Microcap & Penny Stocks : DGIV-A-HOLICS...FAMILY CHIT CHAT ONLY!! -- Ignore unavailable to you. Want to Upgrade?

To: Secret_Agent_Man who wrote (21587)	8/13/1998 11:08:00 AM
From: sandstuff	Read Replies (1) \| Respond to of 50264

FYI, another good post by elk... ragingbull.com

To: Secret_Agent_Man who wrote (21587)	8/13/1998 11:43:00 AM
From: sandstuff	Read Replies (1) \| Respond to of 50264

So when a transaction occurs at the "bid" price it is either someone selling and/or.....its the market makers swapping stock so one of them can buy back at the lowest price (ie, "cover")and the other eats his vig for a return favor down-the-line? AND there is a mutual benefit to both market makers because investors see the price go down so some might sell into it? All of this with no actual trades to investors? Smoke and mirrors, right? What fun.

To: Secret_Agent_Man who wrote (21587)	8/13/1998 12:36:00 PM
From: RocketMan	Read Replies (1) \| Respond to of 50264

The point is, the MMs set the stock price at just about whatever they want, because they have no shares. The good news is that they have set it so low, that we are buying at bargain prices. The bad news is they can set it even lower to make it appear as if DGIV's value is declining, when in fact just the opposite is happening. DGIV today is much stonger than even last week, before we knew that they had signed a deal with NMSS for their state of the art gatewars, before we knew they incorporated state of the art accounting software, etc etc. So, IMO the proper way to look at a MM bid is to think of them approaching you and saying: "I have sold you shares that I did not have, and now I need to buy them back because I am losing money. Would you be willing to sell them to me at ___ (whatever price they want, you can be sure it will be low). " My answer is "Nope." But I do thank them for making a market, and providing a way for me, a small investor, to get in on the ground floor. Eventually, when either they cover (which will be hard for them), they will want the price to go way up so they can sell expensive shares. But the real solution is for DGIV to get listed, at which point there will be many more shares, different MMs, and the rules of the game will change. Then the price of the shares they buy or sell will be driven by market dynamics, by the number of buys and sells, and not by their need to buy back shares at a cheap price. In the meantime, I think of myself as a venture capitalist in a pre-IPO firm, buying in cheap in expectation of being well rewarded when this firm goes public (i.e., listed). That is why I say DGIV is not a good day trader stock, nor is it a good short term stock to own. There are many better ones. But for a long term hold, I don't know of another stock with the upside potential of DGIV.