> ... > > They may have changed their mind seeing that the ipo could fail if unsold > > shares keep depressing the price for too long. > > I still fail to see how they were failing if shares sold slower than > they've actually sold, or why they'd bother to try to manipulate > share prices.
Sorry, but I cannot explain it any better. > ... > > > > Prices are stable because there is hardly any trading besides the ipo sales. > > But the bid/ask spread is very wide (85 / 102), and that is not so great. > > It means when you want to sell you have to take a rather big loss.. > > > > Or wait a bit. This is not a problem, IMO, just a sign of a > thinly traded market. A very illiquid market, indeed. It is not a problem if you are not intending to ever sell you shares. > > ... > > > > As for the price stability, that is of course the advantage of the way they > > did the ipo. > > But the disadvantage of this system is that if the issue receives little > > demand it can take years before all the ipo shares are gone, and that means > > the price cannot go up. > > Many buyers expressed more interest in a gram-denominated > dividend than they did in any particular share price, though. I > think the dividend fans are still quite satisfied. Usually people who buy stocks are also interested to see the price of their stock go up. If the company grows then naturally the value of your piece in the cake increases and that reflects in a higher price for the stock. Those who are interested mostly in the dividend, normally prefer bonds over stocks because bonds give a higher return (bonds giving you 6% or more are not hard to find) and guarantee you to pay back the principal when the bond expires. The company may have trouble to pay back and default on the bonds, but then you are likely to be in trouble if you own their shares too. > > With the "normal" ipo, there is a limited time period when you can sign up > > for the shares, and as soon as that period ends the stock can start trading > > freely up and down. The disadvantage is high volatility during the first > > days of trading. > > Mostly due to distortions caused by favored insiders, yes. This > has certainly been a refreshing IPO from that point of view. Even without favored insiders you are bound to have price swings when the stock starts trading normally. This is because when the ipo signup period ends it is revealed how many people bid for shares and what prices. If an issue is 5 times overbid, then investors conclude that there is strong demand for the shares and hence the price rises when it starts trading normally. If the same stock issue is not completely taken up, then investors conclude weak demand and they try to get rid of these shares as soon as the market opens. That causes the price swings on the first trading days. Of course not so honest favored insiders can play some games on it, and they do. But with the dbourse style ipo the insiders can play other games. No matter how you organise an ipo, there is always possibilities for insiders to profit from the information they have before others have it. You are not going to avoid that, unless you are in favor of complete (over)regulation of the field. > > The advantage is that you know beforehand when the stock will start trading > > normally. > > > > I'm not sure you've ever admitted anything about DBourse is > normal before (well, normal if insiders didn't buy their own > shares, I guess). This is progress! :) With trading normally I mean the trading that happens when the ipo is finished. Now TGC shares are trading "normally" With the dbourse style ipo you don't have the disadvantage of big price swings at the first trading day, but a new disadvantage is that you don't know when the ipo will end (which may be never) People who buy shares to see them go up, these investors like to know when the ipo will end and the stock can start trading normally. > > In the end it means you have to choose for the lesser evil. > > Honestly , I prefer the limited time "normal" ipo at the cost of less price > > stability in the beginning. > > I'd agree, but only if I get to be a favored insider! Quattrone > just got off, stockbrokers, so it's safe to have favorites now. I > am officially available to fill the role. No, it will depend what type of investor you are. If you buy the stocks for their dividends then you will prefer the price stability that a dbourse style ipo gives. If you buy stocks to sell them at a profit then you don't want to wait for an unknown period of time before the stock can go up. As for favored insiders, I really don't have any problem with it. In nearly every business an insider can profit from his position. A second hand car dealer can pick up a nice car at a very cheap price and keep it for own use. An insider at e-gold can buy his gold at cost price rather than go to a market maker. A pub owner can drink beer at wholesale prices. If you want insider favors on the stock market, just become a middle man. Nobody stops you. > > NYSE is not a regulator. > > That's not what the Chairman says (or was "overpaid" for!). The > NYSE *does* claim to be a regulator, according to articles on > (over?)compensation of the NYSE board, it's part of what the > chairman is/was paid for (at the moment he gets a dollar). If you insist on the word regulator, yes, he is regulating his own stock exchange, just like a pub owner is regulating his bar and the parents are regulating their house. There is nothing wrong with 'regulating' your own private property or business. But it is a confusing use of the word 'regulating' , because we usually understand it in the context of regulating things in other people's lives like governments like to do. The nyse chairman is 'regulating' his exchange because that is indeed his job. But it would be better to say that he is 'managing' the exchange. > > On a self-run exchange the door for abuse of many kinds is wide open. > > That doesn't mean every company management would abuse it, but opportunity > > makes the thief as it is said. > > Exactly why I don't trust NYSE's (self-run) middlemen, Danny! If you don't trust them don't use them. But the middle man cannot abuse you. If a stock is trading at $80 and I put in an order to buy at $78 , then either I get filled when the prices drops below my limit or I don't get filled. How he can cheat me? > >... > > Maybe not TGC, but the possibility to enter fake transactions is wide open. > > How many ipo's of this kind would you need before you have some not so > > honest management taking advantage of it? > > You just "pump" the price of the stock with fake transactions that never > > happened inorder to seduce investors to buy up this "hot" stock at ever > > higher prices. > > Some sharks will not see that as a waste of time. > > > > Maybe this is why they've not allowed other share issues? So, you are saying that they are probably aware that it is not a sound way of issuing stocks... > > > > Nobody forces you to trade your stocks on the NYSE, just go to an eletronic > > trading platform where you have no middle man. > > Sure, like DBourse. Well, if they can implement timestamps, stop orders, short selling, automatic funding,etc... then we can start comparing them to platforms like island and instinet. Right now they are still way behind. > > In my brokergae account I have complete choice whether I want to buy (or > > sell) on nyse, instinet, island,... > > And nobody forces you to buy mutual funds. > > I never said they did, I only commented on scandals involving > (once again...) favored insiders getting a better deal than the > little guy. Insiders are favored in almost every business, inevitably. Are you saying we should regulate more? > > A middle man on the NYSE is just making a market in a few stocks, he may be > > honest or not so honest. > > He is not in any way different from an exchange provider that sells you > > e-gold, pecunix, etc... > ... > > No, he has a monopoly on that stock (Muriel Siebert, to her > everlasting credit, wants there to be competition, but right now > there is not). That's not true. You can buy yourself a seat at the NYSE and start making a market in any stock you want. But you will need very deep pockets, as the established players will compete you away. The competition between different market makers for a same stock becomes a winner takes it all game. The market maker that gets more business can offer a tighter bid/ask spread which forces the other competitors out of the business. It doesn't take long until there is only one market maker left for a stock, which gains him a de facto monopoly. But it is the result of a competition won. > ... > > So, if you are in favor of independant market makers for e-gold, then I > > don't understand why you have problems with the middle man on NYSE > > > > Apples & Oranges, see above. No it is apples and apples. If the e-gold market makers would really compete, then soon only one would be left with the best bid/ask rates, and very difficult to compete him away. It does not happen because the market makers operate in different countries with different currencies and languages Danny --- You are currently subscribed to e-gold-list as: [EMAIL PROTECTED] To unsubscribe send a blank email to [EMAIL PROTECTED] Use e-gold's Secure Randomized Keyboard (SRK) when accessing your e-gold account(s) via the web and shopping cart interfaces to help thwart keystroke loggers and common viruses.
