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SPX Corporation Message Board

  • antillo antillo Oct 16, 1998 12:37 PM Flag

    STOCK SWING

    does anyone know what is goin on with this stock ?it behaves just gsx did. dow up, spw down !!!!maybe they should have kept the gsx name.

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    • The stock is dropping for three reasons: 1)
      several index funds (funds which mirror the S & P 500
      index) tendered their General Signal stock (electing
      cash) and now have to dump the shares of SPX stock they
      received (cash was prorated) because SPX is in the S& P
      400 index (as opposed to GSX which was in the 500
      index). The stock ran up last week when it was announced
      that SPX was being added to the 400 index, but the 500
      index is much more widely followed hence there were
      more shares which had to be sold. 2) shareholders
      representing almost 3,000,000 GSX shares failed to make an
      election in the merger, and therefore got stock by
      default. The stock they got was worth much less then where
      GSX was trading (even when SPX was at 48). These
      people probably weren't even aware of the merger and now
      find themselves stock with an illiquid stock they have
      never heard of and with a significant loss to boot. I
      beleive they have been dumping. 3) there is no
      significant short interest, so there is no one to buy as the
      stock plummets. For what it is worth, I have covered
      almost all of my short position, and when not be
      surprised if the selling pressure is almost done.

 
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