Sobesoft, I'm not trying to criticize you, but your statement about the lock-up release shows that you are not a very thorough researcher. In fact, anyone that makes that statement about lock-up releases (which you see all the time) only proves to an experience investor that you are a novice.
Contrary to popular opinion, lock-up releases are one of the best long term events in a new stock's life. Of course pure mathematics almost always makes a stock drop after the expiration. It takes a couple of days for the market to absorb the new shares. But do a little study of some of the stocks that have had lock-up releases in the last six months (you do know how to do research, I presume). Examine their post lock-up performance and tell us what you find.
The addition of new shares allows a whole new group of powerful, long-term investors (primarily institutions) to get into the stock, where before they could not (or would not). How many institutions might be out there that would like to buy RDWR but can't because of the small float and the lack of liquidity?
So many large institutions wouldn't touch a stock like RDWR even if they loved it, because they would not be able to take a meaningful enough position without drastically raising the price. And even if they could avoid driving the price up as they were trying to buy, many institutions (like a large tech mutual fund, for instance) could buy half the damn float and even if the stock did well, it would add a whopping few pennies to its NAV.
Not to mention, when a float is small, good long term holders ironically keep a stock price stay in check because of a lack of liquidity. I have firsthand experience with this at work. My company owned 75% of a publicly traded utility outside the US. The stock price went nowhere because there was not enough open shares to make a market. So we sold down to 51%, releasing millions more shares for the market. Within six months the value of our 51% interest exceeded the former value of our 75% interest. Why? Because there were then enough shares out there to create a market for all potential buyers. New demand ate up the new supply and then some.
The old "scare the weak hands with the threat of the lock-up release" is so pathetic. Please tell me that you are against RDWR for something more substantive that that.
I am a novice invesor. I hope you can be patient with me. What do float and liquidity mean? Why should a large institution not buy stock and drive the stock's price up? Wouldn't it benefit the institution? Thanks for explaining this to me.
is experiencing lock-date fear. This is very common when the date that insiders etc. who bought in can now by law - sell their shares. Many of the newbies in the market are afraid that the stock price will plummit after the lock date expiration - and sell. Usually what happens is that the very fear runs the stock down prior to experiation - which you are seeing now - and right before expiration is a very good time to buy if the stock has underlying value.