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Strategies & Market Trends : The Thread Formerly Known as No Rest For The Wicked -- Ignore unavailable to you. Want to Upgrade?

To: ViperChick Secret Agent 006.9 who wrote (8310)	1/18/1999 10:23:00 PM
From: StocksMTTM	Read Replies (1) \| Respond to of 90042

Any thoughts on WINR?

To: ViperChick Secret Agent 006.9 who wrote (8310)	1/18/1999 10:31:00 PM
From: backman	Read Replies (2) \| Respond to of 90042

(why would lisa be the one to bring EXCITE to everyone's attention?) Nasdaq Panel Looks At Net Stocks By Kimberly Weisul 01/18/99 06:57:00 PM The Nasdaq is having second thoughts about Internet stocks. While long promoting Nasdaq as the stock market of the information economy, the National Association of Securities Dealers has established a special committee to examine the impact of the extraordinary volatility of Internet stocks, which in recent trading frenzies has seen the price of a single company's shares rise as much as $96 in a day's trading. The committee - which could recommend changes in the way stocks are traded on the dealers' exchange - does not appear to include representatives of major online brokerages, who conduct much of the trading in Internet stocks. But it does include traditional market makers, who can be adversely affected by wild swings in the values of individual stocks. The panel is actually a subcommittee of the NASD's Quality of Markets committee. Subcommittee members include the Nasdaq's Senior Vice President Bill Broka; Bernard Madoff, founder of Bernard L. Madoff Investment Securities; Buzzy Geduld, president of market maker Herzog, Heine, Geduld; Kenneth Pasternak, chief executive officer of market maker Knight/Trimark Securities; and Richard Schenkman, chief operating officer of Instinet, an electronic venue for after-hours trading. "There are some specific instances like the opening of IPO [initial public offering] stocks [where] there's someone losing money the whole way down,'' said Bill Burnham, senior analyst at investment bank Credit Suisse First Boston. Internet stocks have a history of opening high on the first day of trading, then falling back. For online brokerages, though, such volatility has a bright side. "I notice on a very volatile day we see more people opening accounts," said Michael Anderson, president of Ameritrade. While the NASD won't disclose who sits on the subcommittee, online brokerages appear to be scarce. Charles Schwab & Co., which owns market maker Meyer & Schweitzer, is on the committee. Ameritrade, Datek Online Holdings, E*Trade Group and Waterhouse Securities are not on the committee. Fidelity Investments did not return calls. The increased volatility of Internet stocks is making it harder, though, for market makers to manage their holdings. If prices for Net stocks do collapse, many market makers are worried they'll be left holding the bag. That's where the Quality of Markets committee comes in. Part of Nasdaq's mandate is to provide an orderly market for the trading of stocks, and the volatility in some Net stocks is precluding that. Because hundreds of thousands of traders now get investing information simultaneously and can use online brokerages to access the markets just as quickly, "we have stocks where the whole float [the number of shares free to trade] trades in an hour on a relatively innocuous release on CNBC [television network] that includes the words 'Motorola' or 'DSL' or 'Internet' or God forbid, all three," Pasternak said. The NASD emphasizes that it may choose to do nothing, which Gomez Advisors' Julio Gomez thinks would be the best course. "I think this is the natural workings of the market struggling with valuations," he said. Options are few. The New York Stock Exchange has a hotly debated practice of automatically halting trading for up to an hour if the Dow Jones Industrial Average falls more than 900 points in one session. A single-price auction, where a stock begins trading at the single price that will clear the most shares, rather than at the highest bid and lowest offer, might make openings more orderly. Some online brokerages are increasing margin requirements, making it harder for customers to trade Net stocks on credit. The NASD already is trying to make one change. On Dec. 22, it applied to the U.S. Securities and Exchange Commission to allow market makers to enter their opening quotes for a new stock up to half an hour before the first trade. Currently, firm quotes can be made only five minutes prior to trading. But Ameritrade's Anderson doesn't think there's much the NASD can do to dampen volatility. "What can a regulator do?" he asks. "I can't come up with a blooming thing."