Thursday, December 12, 2013 11:30:41 AM
How it works
This process can be used by hedge funds to either pump up a stock or to trash a stock but since I am using Herbalife as an example, we will discuss that situation. First information is widely distributed to make investors wonder about the company and to put fear into those longs that hold the stock. Next, high volume shorting takes place to drive the company's share price down.
As the short attack continues, more people parade out news to continue to put questions in the back of investors' minds. On a daily basis, shorts use computerized trading to control the direction of the share price. At opportune times, the shorts overwhelm the buyers (bid price) of the stock by selling short large number of shares to drive the share price down and to eliminate the buyers for the stock at that given time. For people who are not familiar with the bid/ask process of trading stocks, here is a link to explain that process.
Recent SEEL News
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- Form 8-K - Current report • Edgar (US Regulatory) • 08/08/2024 08:06:19 PM
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- Form S-1 - General form for registration of securities under the Securities Act of 1933 • Edgar (US Regulatory) • 06/14/2024 08:06:00 PM
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