Porsche and VW shares

[Satch]

Once upon a time a mostly family run car company found that short sellers could smell blood. And they shorted the stock in one of their holdings. And shorted some more.

Throughout this the family stood firm, buying stock when they could (possibly through options and arrangements with others so the short sellers could not see what the true position was) until one day when it turned out they almost all of the company and the short sellers were in a real mess. Ho ho, cried the Press, evil short sellers get what they deserve.

Except that this was in 1920, the New York Stock Exchange and the Stutz Motor Company, controlled by Alan Aloysius Ryan and his family. And it did not end well for Stutz or Ryan himself.

http://brontecapital.blogspot.com/

 

[Dryce]

Once upon a time a mostly family run car company found that short sellers could smell blood. And they shorted the stock in one of their holdings. And shorted some more.

LOL.

At the moment the hedge funds are pointing their fingers at the banks saying they were irresponsible.

The supposed function of hedging isn't speculation but performing risk management - for a price.

So they claim shorting is about identifying overpriced stocks and somehow they help the market find the correct price level. Tosh.

Why can't speculators just admit when they're speculators? That way they'd maybe realise that they are actually speculating - and that associated with that is risk

 

[carnut]

LOL.

At the moment the hedge funds are pointing their fingers at the banks saying they were irresponsible.

The supposed function of hedging isn't speculation but performing risk management - for a price.

So they claim shorting is about identifying overpriced stocks and somehow they help the market find the correct price level. Tosh.

Why can't speculators just admit when they're speculators? That way they'd maybe realise that they are actually speculating - and that associated with that is risk

the trouble is they are speculating with our money; either its banks or pension providers. At the end of the day they still get paid handsomely and leave us to see our investments go down. Dont for one moment think this is not happening to you

Im 59 and my pension valuation has dropped 10% in the last 2 weeks!!!

 

[Birdman]

Robert Peston (I think I'm becoming a fan of his) discusses this topic at some length in today's blog.

http://www.bbc.co.uk/blogs/thereporters/robertpeston/2008/10/hedge_funds_and_vw_what_a_pile.html


At one point, he writes,

"Porsche said it would be helping out the squeezed hedge funds by settling "hedge transactions in the amount of up to 5% of the Volkswagen ordinary shares" - which has the effect of releasing 5% of VW's stock on to the market for trading."

So it seems those kind-hearted German car makers do care, well, a bit, about their reputation for market probity. Ahhhhh! It's 'Adopt a Hedge Fund' day. Ahhhhhh

 

[Birdman]

I was wondering where I first saw this story reported - it's been running a while - and found it again, in a blog posted on 17th October. Twelve days ago. And the story starts out well before then. So the hedge funds have been sweating it out a while now.

Here it is:

http://ftalphaville.ft.com/blog/2008/10/17/17150/porsche-llc-the-vw-fruit-machine-explained

 

[Dieselman]

I saw the following news artcle the other day and rembered this thread.

Not sure I feel any sympathy for him though he lost 1 Billion on short selling VW shares..

http://www.iht.com/articles/2009/01/06/business/adolf.php

 

[scumbag]

I am not religious in any way.....but I do recall one of 10 commandments....


Seems it may be a good idea to actually follow the advice form several thousand years ago?