Porsche vs. hedge funds

Well played, Porsche! http://www.telegraph.co.uk/finance/newsbysector/transport/3281537/Porsche-and-VW-share-row-how-Germany-got-revenge-on-the-hedge-fund-locusts.html

Hmmm… What they did would send them to prison in the US (owning stock in a company through intermediaries so you don’t have to disclose it is stock-parking). The result of it was that they made big paper profits that they can’t realize, that VW (a company that produces marginal cars in a terrible car market) was the world’s most valuable company, and there was a terrible market disruption causing already fragile banks to take another huge hit. Creating market disruptions like this just isn’t ethical, no matter what the local laws say. That said, I think it’s pretty cool.

German markets are a laughing stock right now.

Good article. SAC must be getting killed this year.

Yikes, that is a terrible “article.” More like an op-ed piece, really.

chrismaths Wrote: ------------------------------------------------------- > German markets are a laughing stock right now. How so? Personally, I think it’s interesting to see the turnabout against the hedge funds. They play all of the loopholes, manipulating situations for their own gain. They got burned by a company who could do the same thing against them. Sure, HFs do it within the laws but it doesn’t mean that they are doing the *right* thing. Some may call that thinking Boy Scout-ish, but at what point are they doing things that are harming society as a whole and should be stopped, but aren’t because they are rich and powerful? Was shorting the hell out of BSC and LEH, causing a run on the banks and nearly collapsing the entire system for monetary gain, that great for everybody? Myself, I like the fact they got burned.

It wasn’t just that they were shorting stock in financial; they were buying puts, selling futures, buying CDS, etc. But hey, that’s the free market right? These companies should’ve been in a strong enough financial position to withstand that onslaught, and if they weren’t, well I guess they should make room for others that were (BAS?). What’s interesting about the VW situation is the importance of disclosure. I wonder if this situation will strengthen the push for increase transparency of financial companies’ holding across the markets. Would the markets benefit from rules that forced all participants to report their holding on an intra-day basis? They could keep it anonymous if the chose, as long as their total position was accounted for. In addition, maybe they could disclose the percentage of margin used to acquire each individual position. This way investor may be a little wary to purchase securities which are owned by one HF that used 90% margin in the purchase. Plus, the leverage in the security could be appropriately priced into the value of the stock.

Its really hard to have symphathy for Hedge Funds that got burned shorting a corporation.

TJR Wrote: ------------------------------------------------------- > It wasn’t just that they were shorting stock in > financial; they were buying puts, selling futures, > buying CDS, etc. But hey, that’s the free market > right? These companies should’ve been in a strong > enough financial position to withstand that > onslaught, and if they weren’t, well I guess they > should make room for others that were (BAS?). > Who was doing that? This is about the short squeeze on VW. > What’s interesting about the VW situation is the > importance of disclosure. I wonder if this > situation will strengthen the push for increase > transparency of financial companies’ holding > across the markets. Would the markets benefit > from rules that forced all participants to report > their holding on an intra-day basis? They could > keep it anonymous if the chose, as long as their > total position was accounted for. > Just about anywhere in the developed world except Germany, Porsche would have had to declare the position. > > In addition, maybe they could disclose the > percentage of margin used to acquire each > individual position. This way investor may be a > little wary to purchase securities which are owned > by one HF that used 90% margin in the purchase. > Plus, the leverage in the security could be > appropriately priced into the value of the stock. The value of a stock has very little to do with the margin that someone else used to buy it. HF’s will never publicly disclose their positions in stocks like VW or other people would replicate them and save the 2/20.

JoeyDVivre Wrote: ------------------------------------------------------- > TJR Wrote: > -------------------------------------------------- > ----- > > It wasn’t just that they were shorting stock in > > financial; they were buying puts, selling > futures, > > buying CDS, etc. But hey, that’s the free > market > > right? These companies should’ve been in a > strong > > enough financial position to withstand that > > onslaught, and if they weren’t, well I guess > they > > should make room for others that were (BAS?). > > > Who was doing that? This is about the short > squeeze on VW. I know I was commenting on a previous post about HFs selling stock short in the financials.

I drive one. Carrera (996 model if you know Porsche). Really fun to drive.

I absolutely love this article. Pound the Hedge Funds down! Losers