Not just to Justerx, but to all interested parties.
The 'legal' scam.
Don't read that too literally. Has no one considered that Downs could honour the proposed 'special dividend' and still have made himself a million or two.
Here's one example: A company could cause its own shares to fall below fair value. It could buy back the shares, 'carefully', as they were being dumped. It would then own its own shares at below par value.
Then, when the time is right, it makes a press announcement that it intends to pay out a very (unbelievable)attractive dividend from a 'part sale' of a company asset which it may, or may not have made.
As it now holds most of the shares, it can 'feed them out' in a controlled manner as 'speculators' (punters, suckers, whatever) buy in. This will tend to accelerate from slow beginnings until it nears pay out day. By then you will have the stocks rise behind it to encourage more to join the party.
A good cash pay out could be made, along with shares sufficient to keep the company's nose clean. The money coming from the profits gained from selling its own stock, and some from the sale of one of its asset companies (had there been
one).
Most scams, and even regular crimes, are often discovered by exposure from the perpetrators being too greedy. Many could have got away with it had they quit while they were ahead. It's just a thought. I worked out very quickly on some paper how this could be done to return a decent profit. I'm sure you could.
Note: All share dealing is a zero sum game. By that is meant that someone has to lose for someone to gain - well, it always turns out that way. The only way it could work otherwise would be that the share continues to rise in perpetual motion, and no one sold out below the price they paid.
Yes, there are other things at work,such as regular dividends. I know, but that is the basic. The masses today, which includes the burgeoning 'on-line trader' family, use exclusively ' the 'greater fool theory'. Too often they find that they are the greater fool.
