Those hedge fund boys don't like it up 'em:
Luxury car manufacturer Porsche is being sued for more than $1 billion by four hedge funds which claim company executives gave them advice about shares in Volkswagen (VW) without informing them that it was about to bid for the other motor firm... Their complaint said [Porsche] had intended to purchase more than 75 per cent of VW's shares, easing the path for a takeover bid...
Many hedge funds and investors bet on falling share prices in VW but lost money following Porsche's steady accumulation of the stock that drove prices higher. In October 2008, Porsche revealed the extent of its share ownership, sparking a market frenzy that saw the value of VW shares quadruple [and on which Porsche madea colossal profit at the hedge funds' expense]...
Y'see, trying to legislate against naked short-selling is an exercise in futility, and probably pointless, even if it were possible. It's lirttle examples like this that serve to remind the hedge funds that short-selling is not a one way bet, so allowing them now to cry foul and get their money back would be a lesson in moral hazard.
Wednesday, 27 January 2010
Bad Losers Of The Week
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3 comments:
Porsche may have made a tidy profit but shafting your biggest customers may come back to bite them in reduced car sales.
TGS, why should Porsche go to all the bother of making a small profit by manufacturing and selling cars to these jokers if it can just rob them blind?
Weeeelll, there was a huge lack of transparency in the German Bourse and the share transactions of Porsche and VW. But, hey it's their pitch and bat and ball so if they want to run a rigged game so be it. I just won't play there again and neither will the hedge funds. Which is the actual punishment on Germany as capital will flow less freely and growth will be less.
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