Yet Another Chinese Company Anshan Steel gets Blocked from acquiring a USA Company
August 20, 2010Should India Retaliate over Discriminatory US Visa Fee on its IT Companies and if so How?
August 20, 2010Midfield Industries was another overpriced small cap IPO in the Indian market which listed on 4th August.This stock not so strangely has almost doubled in price since its listing as the stock gets gamed like the other small cap junk IPOs in the Indian Market.I had written about the Real Life Manipulation of Aster Silicates Stock which was another fundamentally weak company pumped up by unscrupulous market operators before being unceremoniously dumped.Note the continuous price fall of the Aster Silicates stock which is trading at Rs 74 today down almost 40% from its issue price and 70% from its peak .Midfield Industries is following the same story as the stock which was issued at Rs 133 jumped to as high as Rs 250.There was no fundamental reason for the price rise of this stock,leaving the only conclusion that it was being manipulated.Despite repeated blatant manipulation of small cap stocks the Regulator SEBI is not taking any action.It is hard to believe that the promoters and the investment bankers of this company are not involved in these shenanigans.The only moral from this “Pump and Dump” story is to stay far away from such shady companies that are proliferating in the primary market today.I would not be suprised to see the stock in 2 figures soon from the current price of Rs 190.Atherstone Capital Markets was the Banker to the Midfield Issue while Saffron Capital Advisors was the Banker for the Aster Silicates Issue.
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[…] Silicates Stock as Shady Operators blatantly performed a “Pump and Dump” on the stock.Midfield Industries followed with another small Cap IPO being pushed up to stratospheric levels without any fundamental justification.Greater Fool Games […]
[…] “pump” was surprising and the stock had kept floating at stratospheric heights.I had earlier thought that the dumping had started but it was not so and the stock kept going up.The greater fool games in the stock market wanted to […]
This is how the small caps are being manipulated- the promoters of the company hire some stock manipulators in dubai(there are a bunch based out of dubai) – since almost all big brokers in india accept cash for buying securities & they also provide leverage too with 50% security deposit on any stock, by any I mean even a stock that has jumped 5 times in past one month. So, if stock A is being manipulated- dubai bhai sends his first 50% installment to a set of 10 brokers who buys x number of stock A from open market. The promoters are the one who generally sell here. Now, everyday from now on, dubai bhai calls these brokers, asks one of them to sell x no of stock A and other one buys, creating fake volume everyday. These keeps happening for next one month, increasing the stock price in process. Now, 2 nd set of 10 brokers r choosen who finance this inflated security and 1st set of brokers are called to sell.
Now, the same cycle runs through the second set of brokers with the same result, stock A in all likelihood has quadrupled by now. The same thing keeps happening till the last set of brokers are choosen and because of no interest payment on stock A, one broker dumps the stock in market, causing seller cap in process, other brokers follow suit bcoz their principal is at risk now. The result- straight seller cap for next x number of days till security A reaches back to original value when promoter buys it back. Last set of brokers are being annihilated. Case in point- midfield industries and svc resources ltd. And SEBI doesn’t do anything to prevent such kind of activities.