Investor68 schreef op 4 augustus 2018 11:14:
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Ok, But consider this: On August 2, the day that AMG released its results which was very good, two shorters (Millennium Capital Partners and Millennium International Management) were covering their short positions. The fact that these shorters were covering their short positions indicates that they believed that AMG's result was good. If they thought that AMG's result was very bad, they would not have covered their positions. The question then becomes, how is it that AMG's result was very good and two shorters were covering their short positions, yet AMG's stock price went down and closed deeply in the red on August 2? On August 1, the day before AMG's result, the stock closed at €50,55 per share. But on August 2 (the day AMG released its result), the stock closed at €48,50 per share. Remember that AMG's stock price did not rise significantly in the days leading to the release of the results. So, we cannot say that the price went down because of "profit-taking." So, what is a reasonable explanation for AMG's stock to close so deep in the red with such a good result that was released on August 2?
Yes, the short covering was "not very substantial". But it does not take much to set a company's stock price in a downward spiral. Small sell orders from two powerul Hedgefunds at market opening can easily send a stock price on a downward spiral only for the same Hedgefonds to turn around later in the day to cover their short positions. Take note that AMG has still not recovered from its losses after two days of trading following the release of its results. The shorters are still holding AMG's stock price hostage until they finish covering their short positions. Under this condition of market manipulation, the small individual investors can hardly succeed. The competition is not fair. Those who are charged with the responsibility to enforce the rules to ensure fair competition, such as the AFM, seem to be not very effective in their job. I am afraid that they are all corrupt and the individual investor is powerless to effect a meaningful change of statusquo. The rich and powerful are always oppressing the poor!