Sunday, April 30, 2006

Satellite Radio Stock Manipulation

April 30, 2006

You will often here the terms "stock manipulation" or the "market makers are manipulating" tossed around. Often, people look at this and think that it is just an investor with a case of sour grapes after a bad day with an equity.


Stock manipulation is a major part of the stock market. It happens almost all of the time. There already exist some very compelling stories related to the subject. Overstock.com Was the subject of a news show piece very recently. In fact, at one point in time there were more shares short on the stock than the float!!!!!

If you ever get a chance, look at Level 2 stock quotes. You can see the bid as well as the ask, and often can see some puzzling things happening. Watch level two on SIRI or XM, and look at what happens just before close on some days. You can see the stock pop or drop in a matter of minutes, and it happens with both big trades as well as small trades. Watch the equity during the middle of the day as it approaches a certain price level, and watch what happens to take the stock down off of that level.

The term "naked shorts" has had a lot of press lately. There is one company that is now doing something about it. An SSG reader forwarded this story to me, and I felt compelled to pass it along to you. Stock manipulation is an issue that we all have to contend with, and seeing and understanding the methods to fight it can help investors be better aware of the issue.

Rather than post the whole story here, I think that it is important to let SSG readers check out this blog, and perhaps even bookmark it as a regular reading stop. You can read a very interesting story by clicking here.

The link to this write up is http://tinyurl.com/oxuws

4/30/2006 12:09:00 AM

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