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Technology Stocks : e.Digital Corporation(EDIG) - Embedded Digital Technology -- Ignore unavailable to you. Want to Upgrade?

To: Jules Burke who wrote (3364)	4/29/1999 6:23:00 PM
From: chris431	Read Replies (1) \| Respond to of 18366

Typical Buyer & EDIG relationships (near the end under Institution) Typical buyer? That truly is a tough question that can be answered with little more than speculation. The avg. trade today & yesterday was ~2000 shares/trade. A) Cold called buyers - they're in every stock and all the more likely when the volume is this high....they can range from 18 (age to own personal account & contractually required age to make an oral contract over the phone....although I've heard one under 18 can have a "co-signed" type of account, a broker would be asking for problems if they got acceptance from one under 18. "Dad, bought some stock. It's down 30% though." "No worry son, you can't be making a contract with those people, guess they'll be stuck with those shares they bought and you'll likely be out nothing son" to pre-deceased. I was recently (note "recently" as in past tense) in a tech company which announced a reverse split (ouch, painful) and some other news. After calling up and asking some serious questions, the IR told me I had the first non "lame" (her words, not mine) questions all day....old people had been calling her up asking what a reverse split was (and this company is not a "pump & dump" company which hired a firm to tout their stock to such a degree). Given this, I'm sure there are quite a few individual investors who have just been introduced to the stock from their broker....brokers often have relationships with MM's which make cold calling that much more profitable for the broker. 2) Those investors who were legitimately just introduced to EDIG via the recent Lucent/IBM/Intel relationships. MP3, etc. is all over web news now aday's and plenty of younger to middle age people use the web as a large source of their info. 3) Employees of the companies related to EDIG....Intel/IBM/Lucent are very large companies with plenty of educated, if not affluent, individuals. Word travels in companies, if not by the companies mouth (ie. IBM) then by co-workers who may be working directly with what EDIG will be doing, and then talking to their co-workers not about EDIG itself, but about the 400% gain they just got. 4) Traders....plenty of those....I think today will probably have taken alot of traders out. EDIG is starting to look boring as a trading stock (although it had a few big movements today). A limited gap this morning with a neutral close suggests traders probably didn't buy for the morning gap and will take EDIG out of their sites. Don't get me wrong, there will still be plenty of traders in EDIG for a few more days, but the majority are probably finished. 5) Institutions (non-finance) - the big IF. I suspect some institutions may be in EDIG. The second question is if these institutions would buy on the open market. As a precursor to the discusion, I will start with the assumption that share ownership for corps. can often mean a member on the board of directors (and even greater influence over a companies decisions). Surely Lucent would want to invest in a company for which they are putting great reliance on for what could be a lucrative business. While the Lucent/EDIG deal means little to Lucent at the moment (if you haven't visited lucent.com I'd suggest it....just don't get lost among all the products/services they have ;) there is no question that given the potential, the Lucent/EDIG deal is probably a very important one to Lucent's venture group. When you have big bucks like Lucent, you don't just put a couple million behind an effort when you're competing against other large corps. such as Sony/IBM, etc. Given Lucent's like of EDIG's products, I find there little reason for them not to pick up some shares....a few million dollars to Lucent is nothing compared to the amount of trust they have given to EDIG by selecting EDIG as the OS/player. IBM is another big IF. If IBM is simply a supplier of Micro Drive's to EDIG, there is little to no reason to believe IBM would pick up shares. The VoiceTIMES relationship is another thing. We don't know the value of that aspect of the relationship. If IBM is indeed some how fitting EDIG into its Madison Project, they are in a similar situation as Lucent and would likely invest some money. As I posted some time ago, Intel spends a good chunk of change yearly on investing in venture companies. The amount spent is quite large when compared to EDIG, but is also quite small compared to Intel. If I remember correctly, it was in the low 100 millions. Depending on the scope of Intel's relationship with EDIG, there is again no reason it would not at least pick up some shares. The venture capital groups of all 3 of these companies know that a relationship with them for a small, unknown company, can turn that unknown company into gold. For that reason alone, it gives them incentive to invest in those companies. I will leave the open market issue alone. Some companies buy shares on the open market of those they invest in even though they likely could have had a private placement. Lanier has been left from this discussion b/c they would probably have already made their move. 6) Financial Instutions - An even bigger if, IMHO. Not very likely except maybe to cold call clients with (I'm not sure they can even do that....private transfer instead of market transfer). Some small cap funds may very well be buying....it's hard to pass up a penny stock when they have relationships with Intel/Lucent/IBM & may be associated with the internet. None the less, most institutions do not buy BB stocks or stocks under a certain $ value. I'm sure there are a few funds but I don't really know the impact. There are alot of reasons for small chunks. The small chunks best support the theory that a bunch of individual investors have been introduced to EDIG. It also suggests that there has been alot of trading going on. Yet, when you have a stock like EDIG, which has probably never been institutional dominated, what other way are institutions going to buy up shares than what the individual investor (who has owned the shares) will give them? So, they take the 2000 here, 5000 there, 800 there. Unlike an AMZN or AOL, EDIG isn't likely to have 25 financial firms that all own millions of shares themselves. Because of this, it reduces the availability of buying in large chunks. None the less, this still doesn't solve the dispell the fact that you were buying in large chunks. Could it be that the MM's buy up the shares for an institution and as they build up also pull shares from this pile whenever they get a large chunk from another party (maybe someone else would know if this would/can occur). In conclusion, I don't think the trade sizes will give us any indication with EDIG until large institutions (if there are any in the stock) begin trading amongst themselves. Well, that is my speculation. I'm sure few have made it this far. For those who have, I welcome any comments that would contribute to the discussion. Chris