To: KHS who wrote (964 ) 4/24/1999 12:32:00 PM From: corporal spewchunks Read Replies (1) | Respond to
I have never seen a stock trade in a manner which looks to me so manipulated. If institutional ownership represents 90% of the float and inside ownership is another 7%, that doesn't leave very much in the hands of the public. If there is another 1.4M in stock sold short, the shares actually available for trading are extremely small in number. So I would guess that the dealers are just trading the same shares back and forth with no real profit motive but to conceal the actual shortage of sellers from the public. What they were really doing IMO was trying to break the stock below 6 in hopes of starting a selling stampede but they encountered too much buying at that level. So now they are resigned to inching the stock up and trying to accumulate some inventory along the way so that they can dump it on one of those up 3 point days that are coming. I think one of the dealers did that 40,000 share trade (actually it may have been 50,000 total) and added the shares to its own inventory. Then they let it drop below 7 on very small volume. What they are really doing is advertising for sellers @7 IMO. Controlling the psychological enviornment surrounding a particular stock is key to dealer profits during periods where external events don't intervene. If the company is quiet, the stock price will suffer. How else are the shorts going to be able to cover? Maybe in the options market. Maybe some broker like Schwab, just to take one example, will do the math and decide to ask shorts to buy in their positions That would start something really good for the longs. In the meantime, are these tactics, if true, closer to making orderly markets or more like price fixing? You be the judge. If anyone thinks that I am wrong about this, and I might be, I'll be glad to post a correction on being shown the actual facts. The best defense when prices are being held back is to buy more at the artifically depressed levels.
