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Radware Ltd. (RDWR) Message Board

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  • runlong_1999 runlong_1999 Mar 9, 2000 10:42 AM Flag


    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.

    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.

    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

    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

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    • I am a novice invesor. I hope you can be patient
      with me.
      What do float and liquidity mean?
      should a large institution not buy stock
      and drive
      the stock's price up? Wouldn't it benefit the
      Thanks for explaining this to me.

      • 1 Reply to udwadia
      • 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
        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

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