told you's it'll fall today., page-29

re: whats happened if your trading it you should never be holding overnight. Don't believe the stuff thats posted here...

Here's a good article posted on SS by Marathon:

An article from the latest issue of Barrons
MONDAY, OCTOBER 25, 2004

An article from the latest issue of Barron's Magazine



An Eyeful of Spam

A cautionary tale for speculators
By INGRID EISENSTADTER

THERE ARE THREE COMMON WAYS to play the market: Investing, trading or speculating wildly. And there are three common ways to learn about stocks: analyzing corporate documents, reading business publications or flinging yourself at rumors posted anonymously on Internet bulletin boards.

Here's a story about the difference....

Last March 3, a Seattle-based purveyor of brainy data-mining software blipped onto stock-watchers' radar screens: Insightful Corp. (IFUL) stock showed an increase in volume that lasted all afternoon. It took the small company from a sleepy average of 16,000 shares traded daily to 129,600 traded that day. The stock had been cruising near $3 for a month, and that's where it closed that Wednesday. Even so, a volume breakout is often a sign of news. Where would a duly diligent investor search for it?

Many finance Websites report breaking news, but one of the best is Yahoo Finance, because it delivers news from so many sources: Dow Jones (publisher of Barron's), Bloomberg, Reuters and others, and it also posts company press releases. On this day, however, a Web search would have revealed to IFUL ticker-watchers, um, nothing.

While at Yahoo, there's another place to look for news -- along with rumors, mindless blathering and heated arguments -- and that's on the 6,800 message boards, one to a company, that can be found here. On the night of March 3, however, IFUL posters were just scratching their heads; no news. The day's volume gain, however, left them hoping for the good word the following morning, and they turned off their lights and went to sleep.

All except one....

The next morning, Thursday -- instantly on the opening bell -- IFUL share price rocketed, and in the first 20 minutes of trading gained 63%. It peaked at $4.90, the equivalent of Wal-Mart going from $50 to $80 in just minutes. By day's end, more than 3.5 million shares had traded hands. The stock closed down from its highs, yet remained a bewildering 35% above the previous day. And still there was no news -- a major contract, product launch, merger -- anything to justify the frenzy. This should have caused alarm bells to clang in investors' ears all day long; but no, they clambered on. Day traders quickly piled on top of them, as IFUL's message board revealed. So what happened?


In fact, an early clue to this mystery was indeed on Insightful's Yahoo board. Wednesday evening, just prior to IFUL's moon launch, a user with the alias "skirinkumar" posted message No. 16,394 noting: "There are messages regarding IFUL on numerous Message Boards here at Yahoo Finance," and he provided links to three. He did not say, however, that the messages were virtually identical, so the clarion call "spam alert" never went out. His message was quickly overrun by hundreds of others.

A wary investor, however, would have used Yahoo's search feature, located at the bottom of each message page, to research skirinkumar's links. His efforts would have been rewarded by a floodtide of more than 600 near-identical posts promoting IFUL, which a busy-bee spammer had splashed all over Yahoo's stock-market bulletin boards. The onset of the spammer's efforts corresponded with the first signs of unusual activity in the stock.

Voilà , here was the missing "news." The spam worked so well, because it played into a feeding frenzy already under way: Two days before, Internet search-engine Mamma.com went from an average of 157,900 shares traded daily to more than, yes, 65 million for each of two consecutive days, and Mama was making headlines everywhere. And why? Because the company, which is in a hot sector, had announced net income of a penny a share on its tiny float. Gee.

The spammer's hundreds of posts likened data-miner Insightful Corp. to search engine Mamma.com and also to Google.

Alas for wannabe Google investors, Insightful's not in the same business. Its heavy-duty software products -- S Plus, Insightful Miner, InFact -- are used by pharmaceutical and biotech researchers, financial analysts, universities and government agencies that mine supersized databases, absent the Internet shopper. In fact, last spring Insightful was among the companies chosen by the U.S. Army Research Institute to try to develop software to hunt down terrorists. Insightful is attempting to do this with its product, InFact, which tracks and links events and language semantics, sifting through millions of documents to produce concept maps that visualize the analyzed information.

Using InFact for a Mamma-type key-word search would be like sending a shark after a guppy. But, does Insightful plan to direct its energies to Mamma-like or Google-type search-engine capabilities in the future? "I never think that way," says CEO Jeffrey Coombs.

The weekend after IFUL's run-up, a poster who calls himself "stock_picking_chump" made this observation: "Spammers...board pumpers looking for low-float stocks to hype...is this 1999 all over again?" He was referring to the dawn of the message-board universe, when spam was rampant and con artists could often move share price in small-caps. Yahoo would not police its boards then, holding high the First Amendment while users agonized about the spam, fraud and mind-numbing obscenity rampant on its boards.

As posters abandoned Yahoo for nascent forums such as ragingbull.com and siliconinvestor.com, Yahoo decided that maybe the First Amendment wasn't so red hot after all, and made some laws abridging freedom of speech. Today, Yahoo quickly deploys message-board clean-up crews to respond to complaints: All the IFUL spam was deleted within three days. Yahoo's efforts have largely succeeded and the spam problem now is tiny compared to what it once was. But, there will always be enough spam to ensnare investors who do not do their homework.

In the months since IFUL share price soared, it has plummeted to well below where it was when the hubbub began. This happened because Ernst & Young resigned as the company's auditor, but without providing any explanation to the company, according to CEO Coombs. At the same time, Insightful's CFO resigned, which left the company unable to file its 10-Q. As a result, two months ago the dreaded E was added to its ticker, IFULE, signaling noncompliance, and this sent shareholders running. In September, however, the new CFO, working with the new auditor, got the company's paperwork in, and the threat of delisting is now gone.

So, what's in the company's future? Likely something better than its present, which is under $2 a share: Early last month, Insightful announced its third consecutive profitable quarter, after three years of losses due to "investing in sales based on very optimistic targets that we didn't achieve," according to Coombs. He now expects 5% revenue growth above last year. Among the moves fueling the turnaround, Insightful recently purchased for $2 million from Lucent Technologies the copyright for its S Plus language, and this eliminates substantial annual-royalty payments. In August, the Department of Defense signed two new deals for InFact, worth $400,000 each, to be recognized over the next four quarters, according to Coombs; and he also anticipates a new version of InFact for release before long.

So today, the patient investor who bought the company at its highs may have something to hope for. And patience is a key word. So is restraint. Don't leap onto a stock because of rumors on message boards. Or rumors on television. Or in newspapers. Due diligence still is needed.