Wednesday, October 29, 2008

Short Squeeze!

I haven't felt that good for long! When I first read the news I was kinda like getthef*ckouttahere... The Bloomberg news sez, Volkswagen overtaken Exxon as the world's highest market cap company. Duh?! WTF happened?!

It seems that Porsche SE, owner of about 40% of Volkswagen outstanding shares has been buying VW stock for sometime. However, since the September financial earthquakes and the associated tsunamis, the stock recently became a preferred shortseller target, damn the shorting bastards! The most shorted stock on the DAX, word has it. The chart on the left depicts this behavior clearly. Until three days ago...

Porsche had enough with that shit and went like: Herr Ober, we gonna own that stock for good. They announced their intent to buy themselves into a 70+% ownership stake and that they had secured agreements with some heavy stakeholders to do exactly that. By doing that though they squeezed the pool of available liquid stock, as many stock owners held stubbornly to their positions and thus, panicking shortsellers went out to pay anything possible to get out of their monumental losses! The stock jumped to levels unseen in its history and the history of the DAX.

That's the name of the game I'd give a year's salary to see happening again, to many more stocks this time... It's called short squeeze.

About the same time this was going on on the DAX, Goldman Sachs and Morgan Stanley stocks were plummeting in NY! Say what? Yes sir! Rumor has it that those leeches from New York City haven't learned their lesson yet. Probably, trying to recover loses they incurred in their toxic subprime hit assets, they've been shorting anything that moved. Société Générale of France was mentioned in the VW case as well. Official spokesmen of the three groups remained silent in all the tongues they speak. But the underground rumor mill of the 'smart money' knew a lot better; smart money are the professional and powerful investors who manage to keep one step ahead of the rest of us in the herd. If it proves that these three, MS, GS and SG are behind this, I hope the f*ckers lost zillions in the transaction. And it's about time some stupid government intervenes to stop them and all the others from destroying otherwise great companies that feed the millions of families of their honest workers in order to enrich themselves beyond obscenity! Gosh, I sound like Hugo Chavez right now, God forbid!

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