A good friend of mine has an uncle that owns a company that manufactures canned and frozen vegetables. They are currently being inspected by the FDA and my friend says that if they find a few secretly known serious code violations, then the company will likely shut down (obviously decreasing the value of the stock) for an indeterminate period of time.
I have a lot of stock in this company and right now it's going up, and he says I should ride it until about the 17th and then sell it all. Then, after the company nosedives buy it back. It really does sound good when you first think about it, but I'm wondering if there are any hidden dangers here I should avoid. I really don't want to lose any money in this whole thing.
Anybody have any ideas?
2007-10-15 07:30:29 · 9 answers · asked by Anonymous in Business & Finance ➔ Investing
What's the company's name? I'd like to get in on this if you wouldn't mind.
2007-10-15 07:37:04 · answer #1 · answered by Anonymous · 1⤊ 1⤋
I would not be as worried about insider trading as I would be about a scam.
Here is how I would pull of a scam like this. I would buy up some put options on the company. Then I would spread rumors about the company that make people panic and then sell. This will cause the price of the stock to fall which would cause the value of the put options to rise. I would sell the options and walk away with a nice bit of money. If I don't do a super large amount of options, it will be very hard to track me down. Meanwhile, the company loses money and investors jump ship and possibly lose money thru fees. Also, the last investors to flee will be hurt the most. They will be the ones suffering from the price drop.
2007-10-16 08:58:12 · answer #2 · answered by A.Mercer 7 · 0⤊ 0⤋
You, your friend, and uncle can all be charged by the SEC for insider trading. Hope you like prison (can you say Martha Stewart??).
2007-10-15 18:57:33 · answer #3 · answered by Anonymous · 1⤊ 0⤋
If you're worried about it dropping, set a stop loss or trailing stop to protect your downside. Insider trading is illegal, and unethical but unless you own a lot of shares, you probably won't have any issues with the FTC
2007-10-15 08:00:51 · answer #4 · answered by zzgorch 3 · 0⤊ 2⤋
Ahhh, I certainly have completed this mod. you may drill and get rid of each and all the inards of the can. it is going to require some tactics which comprise a rivet gun, die grinder, and posibly some bandaids. yet regrettably it relatively is finished.
2016-11-08 09:55:33 · answer #5 · answered by dhrampla 4 · 0⤊ 0⤋
1. Its illegal to trade on inside information.
2. If you sell and then buy, it will look very suspicious, and may not qualify as a sale and repurchase for tax purposes.
2007-10-15 07:38:07 · answer #6 · answered by hottotrot1_usa 7 · 2⤊ 1⤋
If you follow this tip and it is ever proven that you had inside information you could open yourself up to severe fines or even jailtime.
2007-10-15 07:39:03 · answer #7 · answered by jettyspagetti 4 · 2⤊ 1⤋
If what you say is true. It is illegal.
Google Martha Stewart and find out why she spent her vacation in jail.
2007-10-15 07:49:49 · answer #8 · answered by joe s 6 · 2⤊ 1⤋
Yes!
Jump on this "sure thing" as soon as possible....
you're in for a bundle...
p.s. email me the company name, Please?
2007-10-15 07:36:06 · answer #9 · answered by Anonymous · 1⤊ 1⤋