Warrant issuers don't normally manipulate prices to kill off warrant traders. They make money from the increased commission (due to more trades) and from the spread of warrant buy/sell prices. They will also hedge/protect their position against the warrant traders by purchasing the mother shares if the warrant is in the money.
I don't think CIMB still have 50,000,000 outstanding Zhulian-CA floating in market... I have been trading Call / Put warrant since 2008, never since an issuer drastically selling / buying mother share due to the near expiry of 1 call warrant..
for me it doesn't make sense. Call warrant itself has high premium to secure the IB to win when they issue. Moreover, you do not know who hold the call warrant the most, do you? Ask yourself, what kind of consumer products you are selling which have its quarter earning drops more than 60%? Guys this is MLM company, whoever bought into this company, are you all clear on MLM business model?
The model seems to me is similar to ponzi scheme Initially they reward and give high dividend and returns to lure more ppl Once collapse the last one to enter will get fools gold They will be digging for sands and mud
Warrant issuers actually do manipulate by holding both the mother and the child If cheaper to , they can just sell the mother off in open market to cause price panic When it goes down maybe the call warrant can expire at lesser price to convert and hence worthless u can see how they do even last time drbhicom call warrant ppl complain as last day to expiry the mother share was forced down in last 10 minutes or so with no reason
well, when the share price drops more than 20%, with the tremendously high volume traded, do you know who are the one selling the mother shares? If you say CIMB,it sounds ridiculous. Do you think CIMB has so many shares? Even if it has, the share is mostly hold under nominees for certain client or under their fund management. Do you think they take their client's stock for granted?
Well, it is just my wild guess, it is better for one to find out their top 30 largest shareholders. it is more than 10M shares traded if i am not mistaken
Do not underestimate what cimb can or cant do ...They can sell "some" to trigger the panic and release the bad news follow by downgrading on the company Then when people see massive selling they will also throw But in this case looks more like Zhulian screwup by itself It's business model is highly advance ponzi scheme
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ipomember
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Posted by ipomember > 2014-01-24 10:15 | Report Abuse
can somebody tell me that this article sounds logic? lol