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 : Ampex Corporation (AEXCA) -- Ignore unavailable to you. Want to Upgrade?

To: Hal Campbell who wrote (4456)	1/13/1999 11:03:00 AM
From: Scott Pedigo	Read Replies (1) \| Respond to of 17679

Well one thing for sure, if there ever is news, it will almost certainly be good news. But let's assume that: 1) it's really the case that no news is forthcoming 2) the price rise is due to a big investor buying AXC, not tax-loss sellers getting back in Now, absent impending news, what could be a reason for a big investor to buy AXC? Here's a theory I'll throw out - a huge amount of money has been pouring into the markets and the fund managers have to put it somewhere, usually in large cap stocks. But exactly because of this, the large caps are all extremely overpriced in general (we won't even go into the Internet stocks here...). The only place left for value investing is mid cap and small cap stocks, usually ignored because the entire float would be peanuts for a large fund. But now, in desperation, at least one manager is even buying chunks of reasonably priced small and mid cap stocks, in our case AXC. Hey, you can't say that AXC was overpriced at $1, when this rally started. Also, it is at least a relatively well-known company. Unlike many of the thousands of other stocks being traded, like Joe's Restaurant Holding Company or whatever. So in this case, the price will stay up until this big investor has obtained however many shares he told he his broker to buy, and the heavy volume will continue due to this accumulation, until all the sellers at his max price are out. Then the price may stabilize with little volume, if the remaining holders are not willing to sell at that price and the big investor won't pay more. This is the situation with one stock I own - CMND - almost zero volume because nobody wants more at the current price, but nobody is willing to sell at that price either. Or the price could drift down again if the big investor quits buying, but has not yet bought all the available shares at the prevailing price.