Reply to: Question for you sharedealing types

[SpontaneousOrder]

That's what they're referring to when they say "pump & dump"

[speling bee]

I think make[sic] (puntastic high five) is probably redundant considering he's just consumed 4 Greggs Corned Beef Pasties. But this has now blown my original theory out the window.

We welcome feedback.

[speling bee]

Sort out your sig. It's very clientCo unfriendly.

Suity will be round shortly to hold a stakeholder requirements workshop.

[mudskipper]

It's not clear from the info we have that slim suity was following a healthier diet. It's entirely possible he was make himself vomit behind the bins round the back of Gregg's.

Sort out your sig. It's very clientCo unfriendly.

[doodab]

Really? A hedge invests a million in Apple you expect the share price to move significantly?

The amounts being invested weren't part of the original post though. Buying half a company will tend to trigger share price moves for reaaons other than pure supply and demand e.g. takeover speculation.

[Pondlife]

It's not clear from the info we have that slim suity was following a healthier diet. It's entirely possible he was make himself vomit behind the bins round the back of Gregg's.

I think make[sic] (puntastic high five) is probably redundant considering he's just consumed 4 Greggs Corned Beef Pasties. But this has now blown my original theory out the window.

[speling bee]

Both good points. However, Slim Suity used to buy a 6" turkey sub and a bottle of water from Subways at a cost of £4.50 but since going off the rails is now procuring 4 corned beef pasties and a can of Tango from Greggs for a total of £3. The wardrobe is a red herring since he only wears elasticated tracksuit bottoms from JD Sports.

HTH

It's not clear from the info we have that slim suity was following a healthier diet. It's entirely possible he was make himself vomit behind the bins round the back of Gregg's.

[Pondlife]

Let me try.

Slim Suity goes contracting and earns £9 per hour, with all his new money he goes off the rails and starts to eat all the pies. Now Fat Suity he still earns £9 per hour but now has to buy a new wardrobe and cannot get on his bike because the wheels have buckled.

I hope I've answered your question.

This is a very useful analogy. It is also important to consider the impact on share prices at Gregg's and Fat and Fabulous menswear.

Both good points. However, Slim Suity used to buy a 6" turkey sub and a bottle of water from Subways at a cost of £4.50 but since going off the rails is now procuring 4 corned beef pasties and a can of Tango from Greggs for a total of £3. The wardrobe is a red herring since he only wears elasticated tracksuit bottoms from JD Sports.

HTH

[alluvial]

And don't forget the bid-offer spread. You may be able to buy at 6p but the bid price will be lower and so you will only be able to sell them at a lower price than what you paid for them.

[speling bee]

Let me try.

Slim Suity goes contracting and earns £9 per hour, with all his new money he goes off the rails and starts to eat all the pies. Now Fat Suity he still earns £9 per hour but now has to buy a new wardrobe and cannot get on his bike because the wheels have buckled.

I hope I've answered your question.

This is a very useful analogy. It is also important to consider the impact on share prices at Gregg's and Fat and Fabulous menswear.

[Bunk]

Only if they can sell 300k in one go. What usually happens is other people jump in when the price is rising pushing the price up further before the sell. They are the ones who get stung by the pump-and-dump.

[speling bee]

I think you're missing the point of my question.

@4p HF buys 100,000. Costs 4K.
@5p HF buys 100,000. Costs 5K.
@6p HF buys 100,000. Costs 6K.

Total spend 15K.

HF now sells 300,000 at 6p. Total back = 18K.

Now, if these jumps in sp were soley due to the buys from the HF, did they just make 3K out of thin air?

They wouldn't be able to sell them all at 6p. Just as starting to buy would trigger a price increase, starting to sell would trigger a price decrease. Supply and demand.

[suityou01]

Lets say the hedge fund buys 300,000 shares

The first 100,000 he picks up for 4p, and then the market is begining to notice there is a demand so sellers stick the price up, he then picks up the next 100,000 for 5p,price goes up again and he then picks up last 100,000 for 6p.

When he sells it goes in the opposite direction.

Therefore profit=0.

I think you're missing the point of my question.

@4p HF buys 100,000. Costs 4K.
@5p HF buys 100,000. Costs 5K.
@6p HF buys 100,000. Costs 6K.

Total spend 15K.

HF now sells 300,000 at 6p. Total back = 18K.

Now, if these jumps in sp were soley due to the buys from the HF, did they just make 3K out of thin air?

[BlasterBates]

Lets say the hedge fund buys 300,000 shares

The first 100,000 he picks up for 4p, and then the market is begining to notice there is a demand so sellers stick the price up, he then picks up the next 100,000 for 5p,price goes up again and he then picks up last 100,000 for 6p.

When he sells it goes in the opposite direction.

Therefore profit=0.

[MarillionFan]

It depends what they paid. I don't see what it has to do with the size of the company.

Let me try.

Slim Suity goes contracting and earns £9 per hour, with all his new money he goes off the rails and starts to eat all the pies. Now Fat Suity he still earns £9 per hour but now has to buy a new wardrobe and cannot get on his bike because the wheels have buckled.

I hope I've answered your question.