Wow Wachovia
Yikes!
Thug vs Thug: Porsche 1, Hedge Funds: 0
The latest drama is fun. VW became the largest company in the world, in terms of market cap, ahead of EXXON on a little financial market coup d'etat orchestrated by Porsche. Apparently VW stocks was on the way down, I don't know the details but many Hedge Funds (HF) were short the position. Fine. The price goes down. Porsche starts buying the anonymous float (and probably some private too?), but the point is they build a 73% market share without many people noticing. In the US you would need disclosure after 10% or so. Point is, that many HF wake up and realize that their short position is about to lose a lot of money. So what do they do? those idiots? they short cover all together, which means they buy the stock to cover the short. The stock zooms up, by a full multiplier and overtakes EXXON. Porsche makes A KILLING in the process and has robbed the city robbers to the tune of "potentially $30B". Not bad for a days worth of work. PS: hey, psst Porsche! With t
Comments
http://www.ft.com/cms/s/0/bf8246aa-8f13-11dd-946c-0000779fd18c.html
PS Isn't this fun!?
Things are going way too fast and there is no sense in it all that I can discern. Also some times I feel like I should stick myself in a macro/micro week class from a UNI.
Re Wachovia, it is time to start thinking in reverse, it doesn't matter who is disappearing and it is going too fast. Plus we should really keep tabs on who is likely to emerge at this end of this consolidation phase. People used to call JPM and BofA. A few Europeans perhaps? The US of A is constantly complaining that EU subsidizes their industry, well here is an example where reciprocity will take a brand new socialist, protective meaning on behalf of the US. Of course, cro-manions are busy destroying this rescue on behalf of ideology.