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  1. Default A Netflix observation and question

    I was puzzled on Monday morning at the pre-opening of the market.

    So what the heck was the deal; Columbus Day? Why, before the market was even open, was the Dow up more than 200 points? Why was Netflix opening $10 dollars/share higher than Friday? ($118 on Friday to $128 Monday). How is this even possible? I called the Fidelity Active Trader guys to chat about it. First, the guy mentioned pre-market sales. I said; Ok; sure. That can boost a stock a couple of bucks; but $10… no way. You would need a volume of a million traders to boost a stock that much. So, then how? Then the man tells me, "A company can change the Ask price of a stock dependent on a major shift in the company." (Such as Netflix change where they are not going split off their DVD from their streaming business. Well for people that went long on Friday, expecting a rise that was good for them, But people who held shorts on Friday would have had a rude awakening (although the stock dropped more than $10 anyway on Monday).

    So, companies can manipulate their stock prices over night? I know they can perform 'splits' but I didn't know they could just boost their stock price at a whim.



    Any thoughts about this? And why did the DOW open more than 200 points higher on Monday morning?

  2. Default

    The market has a mind of its own.

  3. Default

    No, a company can't change the share price of its own stock on a whim.

    Looking at the chart, I see nothing unusual. Netflix had gone up for about 5 days and momentum drove it higher at the open, after which, it fizzled.

    Stocks can actually move more on LOWER volume than higher volume, so it's not unusual to see big moves in premarket/aftermarket.

  4. Default

    Study up supply and demand my friend.

  5. Default

    Hmmm.. You don't see anything unusual? I looked at Close price and Open price from 9-20 to 10-11. In every instance but the 7th to the 10th (Columbus day), the Close to the next Open never exceeded $3. Most days it was less than a dollar Close to Open. Only those two days had this erroneous jump of $10. From what I see now, there was a huge volume jump. I have to guess that caused the jump because there were allot of messages about selling it short if it hit $128, which is pretty close to where it opened. Interesting. No complaint mind you; I'm just trying to understand the jump. Thanks.

  6. Default

    In the premarket and aftermarket the bids and ask can be very far apart. All it takes is one lunatic panicking and you get a wacko sale - or some greedy fool setting the ask really high so that a newbie bites. Volume means nothing unless you know what the volume was for a given price. Also people screw up - they drink too much, load up on hallucinogenics, and go into weird worlds where they think they need to live in a bunker if Greece can't pay its bills.

 

 

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