When Promoters Cry Foul ; Managements Blame Bear Cartels Whenever Their Companies' Stocks Get Hammered. Bt Looks at the Psychology Behind It.
Business Today › February 25, 2009
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Summary
June 2006: Real estate firm Unitech stock price rises from below Rs 1,000 in January to over Rs 12,000 by May end. Reason: rising real estate prices, a liberal 12:1 bonus and a 5:1 stock split. October 2008: Unitech's stock falls nearly 60 per cent during the month in the wake of falling real estate prices and fear of a liquidity crunch being faced by the company.
The two scenarios depict the extreme manner in which stocks move in bull and bear markets. But these are also significant for the way in which company managements behave in such situations. In 2006, when Unitech stock was scaling jaw-dropping heights, the company's management did not deem it fit to declare reasons for its dramatic surge. But, when in October 2008, its stock price fell more than 50 per cent in just a day, it promptly blamed a bear cartel for spreading rumours against the company and said it would lodge a complaint with the Securities and Exchange Board of India (SEBI).See the full content of this document
Extract
When Promoters Cry Foul ; Managements Blame Bear Cartels Whenever Their Companies' Stocks Get Hammered. Bt Looks at the Psychology Behind It.
Similarly, ICICI Bank and Educomp Solutions kept mum when their stock prices were soaring...
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