NASD Brokerage Commissions

Written by William Cate


Continued from page 1

Maker Makers can buy stock for their own account. If there's strong Bid demand,repparttar Market Maker isn't obligated to reflect it inrepparttar 112500 Bid & Ask prices. This allowsrepparttar 112501 Market Maker to buy shares at lower prices for their own account. Once they ownrepparttar 112502 low-priced ask stock, they reportrepparttar 112503 stronger bids. They sellrepparttar 112504 stock, addingrepparttar 112505 stock sale profit to their spread. A heavily traded stock makes money for anyone making a market in it.

The goal ofrepparttar 112506 NASD was to haverepparttar 112507 Market Making broker act like a stock specialist onrepparttar 112508 American or New York Stock Exchanges. It doesn't work becauserepparttar 112509 NASD broker makes their money buying and selling stock for their own account. The Stock Exchange Specialist makes money by buying and selling shares to maintain an orderly market inrepparttar 112510 company's stock.

If you are a public company, investigate how your market maker handles trades of your stock. If they are solely interested in their short term profit, meet with them. Restructure your agreement so thatrepparttar 112511 Market Maker makes money, but your company benefits.

To contactrepparttar 112512 author: Visitrepparttar 112513 Beowulf Investments website: [http://home.earthlink.net/~beowulfinvestments/] Or, visitrepparttar 112514 Global Village Investment Club Website: [http://home.earthlink.net/~beowulfinvestments/globalvillageinvestmentclubwelcome/]

He has been the Managing Director of Beowulf Investments [http://home.earthlink.net/~beowulfinvestments/] since 1981 and is the Executive Director of the Global Village Investment Club [http://home.earthlink.net/~beowulfinvestments/globalvillageinvestmentclubwelcome/]


Why Stock Support?

Written by William Cate


Continued from page 1

It doesn't matter ifrepparttar underwriter signs a "Best Efforts" or "Firm Commitment" underwriting agreement. The day that your underwriter questions your stock support plan isrepparttar 112499 day you'll lose your financing. You need more than a stock support plan, you need to prove constantly that you can execute it. This isrepparttar 112500 reason that you must have someone on your staff familiar with stock support issues.

Firm Commitments aren't firm. The underwriter will have several clauses inrepparttar 112501 Agreement that allows them to withdraw for vague or unspecified reasons such as "market conditions." I've worked with scores of underwriters overrepparttar 112502 years. The real reason that these underwriters withdrew from over 90% of their "Firm Commitment" underwriting agreements was lack of faith inrepparttar 112503 ability ofrepparttar 112504 company to make a market in their stock. Keep in mind thatrepparttar 112505 company paidrepparttar 112506 underwriter a non-refundable 1.5% fee forrepparttar 112507 "Firm Commitment" underwriting agreement. This means $15,000 for every million in proposed gross proceeds fromrepparttar 112508 underwriting. Underwriters won't refund this fee.

My advice is, put your money into your stock support program and not a non-refundable "Firm Commitment" underwriting fee. Your company should hire someone to develop and implement your stock support program.

The other side of this coin is thatrepparttar 112509 structure of your underwriting has a lot to do withrepparttar 112510 success of your stock support plan. Doing a million-dollar Private Placement at ten cents will permanently destroy your share price. Seek your company's financing inrepparttar 112511 multi-dollar range. A "Hot Stock" can do an IPO over $20.00. A startup company is lucky to place their stock at two or three dollars while raising a million dollars.

Have a stock support plan before you arrange your first meeting with a potential underwriter. If you can't answer stock support questions, you are wasting your time arrangingrepparttar 112512 meeting. Furthermore, you won't get a second chance to sell that underwriter on your company. Once your company is rejected by several underwriters, no one will want to meet with you. A credible stock support plan isrepparttar 112513 key to finding an underwriter for your company.

To contactrepparttar 112514 author: Visitrepparttar 112515 Beowulf Investments website: [http://home.earthlink.net/~beowulfinvestments/] Or, visitrepparttar 112516 Global Village Investment Club Website: [http://home.earthlink.net/~beowulfinvestments/globalvillageinvestmentclubwelcome/]

He has been the Managing Director of Beowulf Investments [http://home.earthlink.net/~beowulfinvestments/] since 1981 and is the Executive Director of the Global Village Investment Club [http://home.earthlink.net/~beowulfinvestments/globalvillageinvestmentclubwelcome/]


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