Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: Glenn D. Rudolph who wrote (31322)	12/27/1998 10:27:00 PM
From: getgo234	Read Replies (2) \| Respond to of 164684

Glenn and others: There was an article by Chris Byron on Thestreet.com dated 12/24 which discusses the extraordinary appreciation in AMZN's stock value this year. The author notes that AMZN'a price performance was totally a function of the scarcity value of its stock. He notes that the stock was listed by NASDAQ until recently as a so called UPC 11830 stock. IAW the author that's a zero borrow security meaning that every purchase by a retail investor automatically created an offsetting short sale by a market maker, who had to go out and cover the short with a purchase for his own account. Questions: I am surmising that what the author is saying is that when an order comes in to the market maker and there are not ANY shares available at ANY price, the market maker must borrow the shares and thereby automatically place himself(herself) in a short position. PLease correct me if I am mistaken on this observation. But, in the above scenario, why would the market maker not raise the bid price high enough to attract sellers ? With AMZN spiking up on the open in recent days it didn't appear to me that the market maker was forced into borrowing shares of AMZN and subsequently selling those borrowed shares in order to maintain an orderly market but rather he was taking the bid price up to a level where sellers could be found. Your comments please. Thank you all in advance .