“‘Swarming,’ writes Mal Spooner, a Canadian money manager and financial columnist, ‘is the term now applied to the crime where an unsuspecting innocent bystander is attacked by several culprits at once… Because swarming at street level involves violence, it is criminal. However in financial markets it is perfectly legal,'” Philip Elmer-DeWitt reports for Fortune.
“And that, he says, is what happened to Apple (AAPL) last fall when traders detected weakness in what had been Wall Street’s darling stock and started selling it short in large quantities,” P.E.D. reports. “As evidence, Spooner offers the chart above that shows short interest in Apple growing from 8.1 million shares in April 2012 to 20.5 million shares today — a market value roughly equivalent, he points out, to the gross domestic product of Malta.”
Read more in the full article here.
Mal Spooner writes for You and Your Money, “The irony is that short-sellers borrow the stock from real shareholders (via third parties) in order to sell it on the market. After the selling pressure wreaks havoc on the stock price, the short-seller then buys shares at a much lower price, returns the ‘borrowed’ shares to those real shareholders and keeps the profits.”
“I just can’t figure out how aggressively attacking a company’s share price, selling stock that the seller doesn’t even own, for the sole purpose of transferring the savings of innocent investors into one’s own coffers (whether it goes to charity of not) is a noble thing,” Spooner writes. “Isn’t it kind of like a bunch of thugs beating someone up and stealing his/her cellphone declaring it was the loner’s own fault for being vulnerable?”
Read more in the full article – recommended – here.
[Thanks to MacDailyNews Readers “Arline M.” and “Ron C.” for the heads up.]