To: im a survivor who wrote (41 ) 2/10/1999 9:19:00 PM From: Ben Wa Respond to
if this stock had been sitting around $15 and popped to $30 or so on some press release, I think the sustainability of such a move would be longer than the current rise. here's why - it was $2 and a fraction, and not marginable at that level. At many firms, it was probably never marginable, borrowable, etc. so it's not like you have a stock with "X" million shares outstanding and .8X of the shares are short. So, the amount of shorts involved are probably tiny to none. So, without a short squeeze even possible - nobody to squeeze...it's just daytraders playing with each other until they get tired of this and move on to the next toy. I cannot tell you if it will happen at 11:45 tomarrow morning or 2 pm next Tuesday, etc. If I were daytrading, I would prefer to daytrade marginable stocks. Clearly, market makers in this know that day traders could lose interest as soon as the next "thing" comes along. I view the erosion of the gain to occur as follows: market makers will sense the waning of interest by daytraders. Next, liquidity will dry up, and the bid-ask spread will widen as market makers become less willing to take risk. The liquidity sublimation (oooh...what a word!) will cycle back to the daytrader community which in turn, tells them that trading this is becoming more risky. this in turn is feedback to mkt makers, cycles back to daytraders, etc. What'll I do? I will watch this one. If I owned it, I'd be afraid to even go to the bathroom during market hours! Especially given the history of this company...also I think what these folks will be offering is not especially unique, and there are players with much deeper pockets than this little company to provide truly state of the art trading systems to serious daytraders, long term investors, whatever. end of story.
