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Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?

To: GRANOLA who wrote (24870)	5/4/1999 7:13:00 PM
From: RRICH4	Respond to of 77400

MWD analyst on CSCO, the "axe" on the stock, said the other day according to his "good" contacts, CSCO had the quarter "made" half way into the quarter and he would be long the stock going in to earnings and next weeks Interop show. Richie

To: GRANOLA who wrote (24870)	5/4/1999 7:18:00 PM
From: James A. Shankland	Read Replies (1) \| Respond to of 77400

the momos can take it down and they did ... the timing will allow them to get back in before earnings cheaply... OK, I'll bite. Exactly how do they do that? By unilaterally dropping their ask price? What prevents every zealous mutual fund manager with massive 401(k) inflows to invest (not to mention all of us savvy individual investors) from snapping up all that suddenly marked down CSCO stock? Or do "the momos" dump their own CSCO stock on the market to drive the price down? And if so, how much do they dump? Remember that there were 22,434 CSCO trades today, roughly one per second, with an aggregate value of about $1.7 billion -- about $72,000 per second. How much money do you need to manipulate a flow that large? Think maybe 10% of today's volume was "momos" dumping CSCO in order to drive the price down? That's $170 million. And how do they make money on this? By buying back twice as much at the lower price later? What holds the price down while they're buying? Finally, what about all those other NASDAQ stocks that tanked? Were they being manipulated also? How much money did it take to do that? For that matter, if "the timing [allows the "momos"] to get back in before earnings cheaply", what prevents the rest of us from doing exactly the same (driving the price up in the process)? Absent some more persuasive argument, I'll stand by my assertion: it's one thing to manipulate a stock that trades maybe 75,000 shares a day -- that has clearly happened in the past, and no doubt still does (illegal though it is). CSCO is way too liquid for that. The fact is that CSCO moves to a price at which buyers and sellers are roughly in equilibrium. The flows are just too big for anyone to push around.