This ones a heck of a specualive investment but it seems that the institutions are willing to stomp up the cash to back it in the long term.

Heres the latest news from Killik stocbrokers on the company..........

MEDICAL MARKETING Joint Venture

We recently highlighted Medical Marketing (MMG) as worthy of attention. The company, in which I have a personal share holding, has this morning announced the formation of a joint venture, Genvax, to develop a novel DNA vaccine platform technology.

Human trials have been underway since 2001 in areas such as Lymphoma and Myeloma but the technology has broad applications in cancer, viral and bacterial infections (hence the term platform). The technology works on boosting the immune system by teaching it to identify hard to recognise cancer proteins as foreign and destroy them. Early results from the 25 patient trial in lymphoma are encouraging and evaluation of the result is expected by March 2005. Successful results should mean big pharmaceutical groups will start to take financial and commercial interests around that time.

This looks to be the first of a series of announcements due from Medical Marketing as it has a range of predominantly cancer trials moving into the clinical stage. (news flow could push the price higher)

The stock has made good progress in recent sessions up to the mid-80p level where the company is valued at just under 40 million. ENDS.

Please DYOR

cheers GF.

Here it is chiva20. It's 6 pages long. I would suggest you print it or save it to your hard drive for future reference.

Daddy Warbucks - 4 May'05 - 12:13 - 5040 of 5347


Advansuk

A well written piece.

I also wonder whether in Late March/Early April, the MM's sold stock they did not hold and have since been trying to get stock back to repay the 'borrowed stock' lent at that time.

I have pasted a previous post on MM's and would point out part 3 in particular. I am also trying to find a further post from a couplse of months back on how MM's work which could further explain my theory. Will let you all decide.

Market Makers- the official version
1. What are Market Makers?
a. What are Market Makers?

i. Market Makers are companies who have agreed with their clients and who have been approved by regulators to Make a market in the shares of the client.

b. Who are the Market Makers?

i. They are usually large international banking organisations, usually with thousands if not tens of thousands of employees worldwide.

c. What is the job of a Market Maker?

i. Simply it is to make a market, i.e. to ensure that there is always a market in which investors can buy and sell shares of the clients they are Market Makers for.

d. Who is a Market Maker responsible to?

i. Their shareholders.

ii. Their clients.

iii. The broker with whom they are entering into a contract with.

iv. Whilst not strictly responsible to the regulator the Market Maker has to be able to demonstrate that the obvious conflict of interests arising from this list are dealt with in an appropriate manner, and that no one is especially advantaged or disadvantaged.

e. What is a client in the Market Maker context?

i. The client is the quoted company. Quoted companies have contracts with the Market Makers in their stock.

They are usually large international banking organisations, usually with thousands if not tens of thousands of employees worldwide.
2. Market Manipulation or doing their job?
a. Do Market Makers manipulate the market?

i. Market Manipulation is an emotive term, and conjurors images of shady deals and exploitation. Market Makers are not elusive companies that appear then vanish overnight. Market Makers are duty bound to make a market and to meet the needs of those they are responsible to (See 1d.) to this end they may try to influence the market.

b. How Do Market Makers make their money?

i. Market Makers make money from buying shares at a lower price to which they sell them. This is the bid/offer spread. (See 4.) The more actively a share is traded the more money a Market Maker makes.

c. Surely a Market Maker raising/lowering the price on news/rumour without any buying or selling is manipulating the market?

i. No, not really. If the Market Maker was to keep the price steady on the release of news they would find themselves with lots of buys or sells which they had no choice but to fulfil at the screen price but before they could find matching orders (buys for sells, sells for buys) they would have to change the price and they would then loose money through market exposure. This is bad for them and for us. (See 3.)

d. Why do Market Makers raise prices on Monday morning for shares tipped in the Sunday press?

i. This is the same as question 2c, because the Market Maker needs to ensure that there are enough sellers to fulfil the needs of the buyers responding to the tips.

e. Suppose my screen shows all sells and the price is increasing, what is the Market Maker doing?

i. An explanation of this phenomenon is given for Tadpole, which very briefly shot up to 73p before settling back comfortably to the 50p support level. The likeliest explanation is that the Market Maker had an Institutional order to fill and no stock to fill it with (this trade would not have shown up on peoples screen until somewhat later), under thier obligations to create liquidity in the share the Market Maker is obliged to gather a stock holding, only possible if they can encourage people to sell, which can be achieved by raising the price. The order is likely to have been large enough to be significantly outside the NMS thus allowing the Market Maker to gather a fairly significant premium on the price (probably being some-where between 50p and 73p allowing the Market Maker to offset gains against losses and still profit). Once the order is filled and the market volumes return to thier "normal" levels, so does the share price.

f. Do Market Makers ever lower prices to panic investors into selling, sometimes called shaking the tree?

i. Yes, moving the price up, encourages sells, moving it down also encourage sells, take another look at Tadpole, in the first instance, the price was hiked way up despite the 50p support level, but at 50p few of the people who got in between 20p and 45p are going to sell (and look how many buyers there were still at 50p), the rise was meteoric, smart money just ignored it as it only lasted about 2 hours, but what was probably caught was huge investors who were in way before 20p and had forgotten about it, now they want out. The Market Makers order gets filled, the price settles back to a smart support level and volumes decrease, however the Market Makers gets another order to fill, maybe not so big, maybe not so prepared to pay the premium, but you also know that there are a lot of people out there waiting to see if it's going to shoot up past the 50p support level again or dip and if it dips they're going to sell now before it dips back past their 100% profit level.

g. Surely delaying the posting of trades is Market Manipulation?

i. This was allowed as part of the SETS trading system when institutional investors pointed out that with 100% transparency, any other institutional investor would be able to trade against that position which would put their client holdings in jeopardy. Further, with 100% transparency, if it could be seen that an institutional investor was (for whatever reason) adjusting a large holding in a particular company it could also scare private investors into selling or alternatively encourage them to invest without doing thier own research. Both scenarios lead to either over- or under-selling and an inaccurate reflection of the company in the share price as a direct result.

h. Do Market Makers try to reduce volatility?

i. Sometimes, usually at the request of the client (see 1e), this is mostly done by increasing the bid/offer spread therefore discouraging trading especially by day traders and also by marketing the clients shares to institutions in the hope they will take up long term positions.

ii. By asking their client to reduce the number of news releases.

i. Do Market Makers encourage liquidity?

i. Yes, partly because they have a duty to their client to ensure an active marking in their clients shares, and partly because they have a duty to their shareholders, it is only through trading/liquidity that Market Makers make money.

j. How do Market Makers encourage liquidity?

i. Partly just by being there, by being the enabler to liquidity, they will always buy or sell shares if you want to.

ii. By narrowing spreads.

iii. By encouraging their client to produce news releases.




3. Are Market Makers risk adverse?
a. Does a Market Maker hold stocks of the shares they make a market in?

i. No. Market Makers are there to make a market, not to act as some form of stock control system. At any one time a Market Maker is likely to have a position in the stocks they are the Market Makers for, but this position could just as easily be short as long. However having a position (of either persuasion gives market exposure and Market Makers try to avoid this.) (See 3d.)

b. Can Market Makers take a short position?

i. No and yes. Market Makers are not supposed to allow themselves to go short, but in process of making a market they may well find themselves short of a stock. If this happens a Market Maker has a number of options, purchase from another Market Maker, fiddle with the price in the hope that enough sellers will emerge to cover the short or borrow the shares from an institutional investor.

c. What is market exposure?

i. Market exposure is the amount of money you have exposed to the vagaries of the market, i.e. the amount of money you could loose or gain from your positions open in the market.

d. Why do Market Makers avoid market exposure?

i. Simply because a Market Maker who is over exposed to the market is giving systematic risk to the whole market. Ill explain If a Market Maker was to take up lots of large position across the whole range of shares they make a market in then if there was a market crash the Market Maker may find themselves bankrupt (ala Nick Leeson and Barings) and therefore unable to make a market. Once there is no longer a market the shares will become pretty worthless (if you cant sell something, at any price, what is it worth?), this in turn could force other Market Makers to go bankrupt and the whole thing would spiral down into a very unpleasant mess. We would all loose vast amounts of money from our pensions, endowment policies, insurance funds, Unit Trusts, Investment Trust and direct equity investments, in addition to which an important source of cash for companies would vanish!

4. Prices; how do they work?
a. What do the on screen prices reflect?

i. The prices you see on screen are the best prices currently being offered by any and all the Market Makers for the share you are looking at.

b. Why do spreads change?

i. Market Makers can and do change their spreads, but nowhere near as often as you see the spread change on the screens. (See 2h.)

ii. The main reason that spreads change on screen is because the screen shows you the best prices on offer.

c. Why are some spreads so large?

i. The stock may be very volatile and the Market Makers needs to protect themselves from sharp price movements and market exposure.

ii. The client (see 1e.) may have asked the Market Makers to reduce volatility.

iii. The price and NMS combination maybe so small that the Market Makers need a large spread to ensure that they cover their costs and make a profit.

d. Whats an inverted price?

i. The prices you see are always the best prices it is possible that Market Maker A is offering to sell the shares for less than Market Maker B is offering to buy them at. Normally the reverse is true, so this is know as an Inverted Price.

e. Do Market Makers have to buy and sell at the quoted prices?

i. Yes, so long as the quantity of shares you want to trade is equal to or less than the NMS.

f. How come my broker can sometimes get a better price than those onscreen?

i. Basically because Market Makers compete with one another for business. When your broker calls the Market Maker he is giving them the opportunity to bid for the business, the Market Maker may well improve on the price on offer via the screens. The Market Maker only makes money when they are buying and selling, so the Market Maker will prefer to see the business go through their books at a reduce margin than allow it to go to another Market Maker.

g. What is Normal Market Size (NMS)?

i. It is the quantity of shares for which the Market Makers are quoting prices. IE for which the prices are valid.

h. Why dont Market Makers set a price based on intrinsic value?

i. The first person that comes up with a calculation that is 100% accurate for 100% of quoted companies is going to be very rich indeed. Market Makers no more know the intrinsic value of share than you or I do.

ii. If they got the calculation wrong everybody would be buying or everybody would be selling, leaving the Market Maker with huge market exposure.

iii. Intrinsic value is still a notional value, since surely something is worth exactly as much as they highest bidder is willing to pay.

iv. Many investors value in fashion shares at far more than the traditional intrinsic valuation methods would yield, again this would lead the Market Maker having huge market exposure.

i. How come I dont see my trade listed?

i. Trades for less than 3000 units dont have to be reported.

ii. Some stocks dont have to have trades reported.

iii. Your broker has batched up your trade with others.

iv. Your trade was large enough to cause the Market Maker to treat it differently, it will be reported at a later stage.

v. Your broker arranged the trade via an alternative to Market Makers.

j. Do Market Makers make money from the raise or fall in share prices?

i. Probably not. Market Makers make money from trading, at all times they try to minimise the open positions they have, so the actual price of a share is of little consequence to them. (See 3.)

Mickey - I agree with Chiva. I would rather have facts and information posted - I can then choose whether to red them

BTW - I too find your posts informative and useful - especially as I have this in play on the champion investor game as well as for real

Baza

Hi Pumben, no I did not get a response to my e-mail which I sent to Mr Best. Which backs up my thoughts that the PR side of MMG sucks.

I still think this one will come good and beleive it scientists are the ones who will pull it around.

Having looked at the historical price action in depth this one is very much like NLR where you can get on the ride up before it is over. So I feel those that have had to leave will return on mass when the good news breaks.

cheers GF. PS, nice one Mickey on MMs, barstewards.

Cheers Mickey appreciated

GF

Sorry for the hijack boys, but take a look at LNX.

MS

Very good post Mickey,i enjoyed reading that..JB..

How low can this SP go,,did'nt think i'd see it here,,sells now at 126p !!

Thanks Mickey, very good post which let me have a clearer and better concept of the market.

so it could mean MMs got a big buyer, and for last few weeks, MMs tried to lower prices to panic us into selling, in order to fill that big buyer, isn't it? If so, how low the price would gone to be? Until the big buyer get enough?

many thanks
swseun

Its very disappointing to see the sp fall to these levels and the chart looks it could fall even further to 120p..

Previous support levels at 120, 100 and 60.
As this is news driven, it all depends on when the next news is out.

120p is not far at all now

sorry, it's already 120p, lol

This stock is being actively traded at the moment and traders will be aware of the strong support at 120.
These chaps are not greedy or stupid so may well close shorts as we approach the 120 level.

swesun, if the mm's needed to halve it to get stock then they are really taking the piss. As I've said many times, the sp got ahead of itself on the Genvax news and speculation re: Ruthenium and possible deals with big pharmas.
Having said that, I didn't expect to see 120p again!! If the speculation had been followed up with early trials on Ruthenium or a deal the sp would have been much higher, but without news its looks likely to head lower.
If we do see 100p and below as someone else predicted it will be unbelievable, although that would be good for me in terms of buying op and re-entry into MMG I sincerely hope not for the sake of the good folk like you who invested in this at high prices. MMG still has a fantastic portfolio and is potentially very rewarding but learn as I did how this speculative stock trades on news and kills you without it.

Looks like Pete is correct as buyers back in at below 130p, this is a traders share right now, difficult for investors already in or those wanting to get in to guess where the hell this will go. Need some news MMG, that bloody presentation has done nothing to help investors in the short-term. Long-term, if the product portfolio does deliver, investors will have the last laugh.

I'm in at 132p...

andy, you are right, it is very disappointing to see 120p, and now most would expect (even dn't wnat to ) further drop would be in the near further. Even MMG got its fantastic portfolio, if no one realises it, inc. the investors dn't do research, MMs would just take the chance, and let the price down, shake the tree, isn't it?
I have thought to sell and back again, however, I am not very good at that skill. If price grows up, even not to my buying price, I should feel like gainning (i know it sounds ridiculous, but under this situation, I can't help.) But once the "steady growth start, I would buy in again, instead of keep thinking what the bottom price it is. Am I right? Plase let me know your opinion.

many thanks
swseun

swesun, I agree with your point of view, I believe you are new to this lark as I was last year and its best to play the game that you know. For what its worth I would not be selling at 120p in your position, I'd hold and if I got the cash buy lower once I believed it had settled. Doesn't mean I'm right though and it could go down further so its up to you really . IF ONLY, I had not been so ridiculed for suggesting it would fall from 270p to below 200p and there was a chance to trade and buy back later, maybe more would have done what I did but hey, its done now. There was so much hype and enthusiasm that my thoughts were overlooked, I even got stick for delving too far for info re: trial news which whilst justified and I accept that, it was to try and prevent people getting too heavy into MMG because I feared this would happen based upon my experience of the sp. You see, I was trying to help and not shorting, its not my game and I don't have the funds to try it anyway, too risky.

Its fallen form its high of 300p to todays level of 126p.. thats a fall of 62%.. and guess what the fibonnaci full retracement figure is.. you guessed it 61.8%..remarkable.

andy, totally agree with u, it is exactly I mean in my last post. I desided to hold it coz I know it is a good company, and have a bright future. MM is now playing game, but I am not joining in and not panic to sell as well, just hold my share. As righ now, I am out of bullet to buy, so I will wait until the price stable.