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Technology Stocks : Network Associates (NET) -- Ignore unavailable to you. Want to Upgrade?

To: MrThesp who wrote (4454)	3/22/1999 12:57:00 PM
From: Sun Tzu	Read Replies (1) \| Respond to of 6021

It is very hard to move a widely held stock like NETA. There have to be a lot of stop orders hanging around very nearby and you have to sell a lot of shares to move the stock. In general this does not work with liquid stocks. In addition, I find it hard to believe that there are any stops that were not taken on during last week's drop. My guess is that the MMs you are refering to took the buy side of the trade on Friday and are now taking their profits in an intelligent way. Do let us know what you find out on MM manipulations, though. Sun Tzu

To: MrThesp who wrote (4454)	3/22/1999 3:17:00 PM
From: Chuzzlewit	Read Replies (1) \| Respond to of 6021

MrThesp, perhaps I should have phased my questions in a more provocative way. Whenever a stock gets hammered a common theory emerges on these threads. It seems that there is an evil MM, so the theory goes, who has an analyst in his thrall. When the MM gets sufficiently greedy the analyst is unleashed with some mindless downgrade that promptly cause the market to enter into a tailspin just so that the MM can pick up the shares on the cheap for his clients that want in. A corollary of this theory is that there is a cabal of MMs who manipulate the price of the stock for their own nefarious purposes. The point I was politely trying to make (by stimulating some thought) is that all of these theories are nonsense! Stock prices go down only because there are more sellers than buyers at a particular price. Remember, we are talking about a relatively large cap, liquid company with lots of brokerages making a market in this stock. The very fact that volume has been so high and the fall so great speaks to the impossibility of these kinds of theories. Why? I'm glad you asked. You see, the usual way stocks have been manipulated on the NASD is that a few market makers start trading shares between themselves at artificial prices. This requires a stock that is generally illiquid and traded by very few market makers because otherwise market makers who are not in on the scam will begin trading the stock and the scheme falls apart. NASD rules allow the traders to trade around legitimate outside buyers (definitely not fair to us common folk!), and so the manipulators have a field day doing one of a couple of things. They can drop the price, and so pick up the stop losses, or they can raise the price and squeeze the short sellers. Now this scheme works quite well when you have only a few market makers in a small, underfollowed company. There is no way it can work with NETA. I think I am a pretty reasonable person. If you can show me how it can work with a company like NETA I will readily admit my error. So let's start with the following assumption: every MM trading NETA is part of a vast conspiracy designed to bring the price of the shares down. Now we must assume that they are selling huge numbers of shares to the public. Presumably, they are short sales. Show me, please, how they make money doing this. Numbers will help. TTFN, CTC