I am not talking about simple selling.
2006-09-12 09:57:09 · 6 answers · asked by Claudio F 1 in Business & Finance ➔ Investing
Not all stocks are available for short sale. And keep in mind, that eventually, those short sellers must buy back the stock.
The price of a stock or any other asset is determined by Supply and demand in all free markets (Econ 101). The methodology of selling does not distinguish how much the price will go down, only the amount of selling relative to the amount of buying.
Yes the company can split the stock price 2 for 1, for example, but the value of the stock has not changed, since you have twice as much stock at half the price.
There is no legal way to manipulate stock price as you suggest.
2006-09-12 12:08:37 · answer #1 · answered by dredude52 6 · 0⤊ 0⤋
Besides simply selling at a lower cost and short selling there are no other ways that other investor can bring down share price. The company can bring down share price by doing a stock split, issuing more stock, and other ways.
Short sellers do exist and have had share price effects in some rare cases but 99 times out of 100 that a company says the stock fell due to short sellers that was really just an excuse because you could never prove that there was no short selling involved ever. There are many barriers to short selling that make it almost impossible to do successfully.
2006-09-12 17:09:07 · answer #2 · answered by Matt M 5 · 0⤊ 1⤋
Attempts at deflating the price are less than 1% of the cases of price manipulation.
The others are 2% stabilizing the stock price, 13% impossible to classify and a whopping 84% is to push the prices up.
More about it here:
http://www.inside-alpha.com/stock-market-investment-advice-market-manipulation.html
Let's make money!
Good luck
Marc
2006-09-12 20:56:44 · answer #3 · answered by Marc H. Mayor 2 · 0⤊ 0⤋
outYes, they can.
There is an operation in Germany that sell shares of US stock short with borrowing the shares. These are called "naked shorts"! This can be very harmful to a stocks share price.
2006-09-12 17:08:04 · answer #4 · answered by Joe the Expert 2 · 0⤊ 0⤋
That's called manipulating the market and is illegal.
Could it happen? Sure. They could start a rumor that the company is being investigated by the feds for tax evasion or a popular CEO is retiring.
2006-09-12 17:07:54 · answer #5 · answered by SPLATT 7 · 0⤊ 0⤋
1) Yes.
2) You don't need to know that.
2006-09-12 17:36:46 · answer #6 · answered by Anonymous · 1⤊ 1⤋