M
Maxwell 'Danger' Powers (Little Upsilon)
19 Mar 2009 16:35
Link
Hi,
I noticed something recently and wondered if this could be exploited on a larger scale to make money. Or whether this sort of thing goes on all the time anyway.
Here is the thing I noticed:
I recently IPOed a state company, a cable TV services company. About a year (and after offering 15% of shares) later, cable TV had a supply spike and profits tumbled. Share price shortly tumbled to ~10% of what it once was. I then repurchased all the shares and turned the company back to a state one. By my calculations, I sold shares at ~$10-20 and bought them back for ~$3 each. This means I made a tidy profit, no?
So, what is to stop my doing the same thing with all my companies. The vast majority of share buys are by country investment funds which act practically blindly.
Is there something I am missing? Any information about the details of expenses during share buys/sales is greatly appriciated.
PS I believe this is essentially short selling. Betting that over time the prices of a stock will go down.
I noticed something recently and wondered if this could be exploited on a larger scale to make money. Or whether this sort of thing goes on all the time anyway.
Here is the thing I noticed:
I recently IPOed a state company, a cable TV services company. About a year (and after offering 15% of shares) later, cable TV had a supply spike and profits tumbled. Share price shortly tumbled to ~10% of what it once was. I then repurchased all the shares and turned the company back to a state one. By my calculations, I sold shares at ~$10-20 and bought them back for ~$3 each. This means I made a tidy profit, no?
So, what is to stop my doing the same thing with all my companies. The vast majority of share buys are by country investment funds which act practically blindly.
Is there something I am missing? Any information about the details of expenses during share buys/sales is greatly appriciated.
PS I believe this is essentially short selling. Betting that over time the prices of a stock will go down.