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

To: Alan Cassaro who wrote (4628)	1/22/1999 11:05:00 AM
From: Forrest Coile	Read Replies (1) \| Respond to of 17679

Al, that very thing happened to me when I owned Jabil Circuit (NYSE:JBL) when it was listed on NASDAQ (JBIL). The price at the time was 33 (pre-split price). I had a stop loss in at 28. Earnings that beat street estimates were announced after the closing bell. The stock opened the next day at 27, stayed there for about 10 minutes and then promptly started trading around 40 and never looked back. Within a two months the stock was over 120 then split. I am quite positive that the MMs just pulled the first few trades among themselves for the sole reason of harvesting all of the stop losses since there was no reason that the stock should have ever dropped that low under these circumstances. Needless to say, I don't use stop losses any more. Still holding lots of AXC since the pinks. Forrest

To: Alan Cassaro who wrote (4628)	1/22/1999 7:00:00 PM
From: Carl R.	Read Replies (1) \| Respond to of 17679

I agree that it is unethical and should be illegal if it isn't. Even if it is, it would be awfully hard to prove it was deliberate. You are right that a MM can't do it when there are a lot of people buying. In fact, Market makers usually do this when volume is very slow so a few trades can move the stock a long ways. In the ETEC action a few days ago, KLAC announced weak sales, and the number of buy orders probably fell as buyers decided what to do. Also remember that when the stock starts falling suddenly, buyers will usually freeze in the headlights, fearing the worst, and in fact some holders may dump their holdings fearing impending bad news. These psychological factors make it easier for MMs to use this ploy to pick off stops. Carl