Ot: Stock Market Manipulation - Germany Worst Country?

[Kf6vci]

Have you heard about this one? Porsche's profit exceeds its turnover from selling sports cars by several billion Dollars. This makes them the only hedge fund with car factories.

The whole car industry is hurting. Toyota as market leader has been in the news this week. And Bloomberg has a story on GM saying it may not have enough cash to last this year! The outlook for 2009 is worse, much worse. Q: Any reasons why VW should fare better than in 2009? Speak up now!

Analysts see the common stock's FMV in a range of maybe 125 to 50. 50 being heard in a TV interview with DWS, Deutsche Bank's investment arm. that day, without VW, the DAX would have been near 3,400 instead of higher than 4,200!!

At some point, VW was the world's most valuable company, exceeding XOM. XOM just had a quaterly profit of >$ 15 billion.

^^^^^^

Market manipulation like this - without going into details - would likely trigger a wave of arrests. Not so in Germany! Herem the stock exchange is happy as long as "5%" of the shares are "free float". Hear, hear! Lower Saxony controls a 20.3% stake. Porsche had more than 43% when it used its shares in creative ways to make money. they also secretly aquired VW options worht another 31.5% of the common shares.

When the stock price sjyrocketed, naby Bears steooed in. I will never understand why on earht anyone would engage in short selling versus selling the single stock future or buying put options or using CFDs. But they did. The rest is history. +++ Porsche triggered a panic when it announced it's controlling another 31.5% through options. And a few days alterm they benvolently[i became Samaritans, offering to sell 5% into the white hot market.

For weeks, the German regulators refused to even open an investigation! anyone buying up 5% of stock has to report it etc. Not so with the far more powerful options.

^^^^^^

What are your views?

Where do you see VW heading?

How would the SET handle such a situation?

Is anyone long or short on VW?

Does VW have an edge over the competition? I doubt it could even make a truck like ?Toyota's VIGO with a 3.0 liter Diesel engine and make money selling it loaded for around 800 k Baht.

Sometimes, shares rise inexplicably. There was a mobile phone dealer named MOBILCOM. It went from 30 to 1600 and then its founder was embroiled in scandal and the price collapsed.

At some point, VW should get kicked out of the DAX and there might be all kinds of law suits pending.

^^^^^^

Those who trade VOW futures and options on www.eurexchange.com should note that there are no market makers. the stock exchange does not limit spreads etc. If there is no counter party, a trader might be unable to even close a position.

FACTS:

1.) VW's market cap is more than 9 times that of BMW and 3 times that of BWM plus Daimler Benz.

2.) Even if you are a billionaire, do not try this in any other country in the world. In germany's it's okay though. Elsewhere, you might start eating from tin plates

Disclosure: this is just a rant. Author is short on VW and a German. Foto illustrates a tangled web and is not mine.

[Kf6vci]

http://www.forbes.com/afxnewslimited/feeds...afx5669128.html

REFILE-DWS Fund says Porsche broke laws over VW stock -paper

11.09.08, 10:21 AM ET

FRANKFURT, Nov 9 (Reuters) - Germany's largest retail fund company, DWS, accused Porsche SE of intentionally breaking domestic securities laws by cornering the market in Volkswagen AG ordinary stock, its managing director said.

Porsche (other-otc: PSEPF.PK - news - people ) had triggered a stampede to close short positions in Volkswagen (other-otc: VLKAF.PK - news - people ) shares, sending them to over 1,000 euros, when it surprised the market by saying on Oct. 26 it had effectively gained access to 74.1 percent of VW votes, reducing the free float to less than 6 percent.

'The company violated rules against market manipulation, pitted itself against all other DAX companies and caused damage to scores of investors,' Klaus Kaldemorgen told the Frankfurter Allgemeine Zeitung in comments published on Saturday.

Asked by the paper what he meant, the head of Deutsche Bank (nyse: DB - news - people )'s retail fund subsidiary cited paragraph 20a of the German securities trading law (WpHG) as prohibiting dealings that result in false or misleading signs pertaining either to supply or demand or that create an artificial price level.

'Exactly that is what Porsche has done, in my opinion,' Kaldemorgen said.

A spokesman for Porsche dismissed the accusation as 'lacking any foundation', but when pressed by Reuters to respond to the detailed views of DWS he declined to comment further.

WITHOUT RISK

At the time Porsche revealed it had control of 74 percent, reducing the free float dramatically since Lower Saxony holds just over 20 percent, it said the announcement would give short sellers the opportunity to unwind their positions without haste or considerable risk.

Within 48 hours, the stock had nearly quintupled in value and the spread between the ordinary shares and non-voting preferred stock which used to trade within a narrow band had leaped to more than 950 euros.

Kaldemorgen's comments represent the harshest yet amid a storm of criticism from investors over the short squeeze that temporarily made VW the world's most valuable company.

The matter has already prompted a formal investigation by German securities watchdog Bafin.

Kaldemorgen said that while Porsche may have enriched itself by between 10 billion euros ($12.8 billion) and 40 billion depending on the number of call options on VW ordinaries Porsche may have sold or exercised, the rest of the market suffered losses as a result.

Index funds were forced to 'synthetically' buy exposure to VW through the purchase of futures for the entire DAX and the subsequent sale of holdings in the other 29 German blue chips that comprise the index.

'The bottom line is everyone lost: the other DAX companies, the private wealth managers and their clients, retail investors, even the (Deutsche) Boerse, whose reputation suffered just like that of capital markets overall. And all because one company did not play fairly,' he said.

(Reporting by Christiaan Hetzner; Additional reporting by Vera Eckert; Editing by David Holmes) ($1=.7815 Euro) Keywords: PORSCHE VOLKSWAGEN/FUND

([email protected]; Reuters Messaging: [email protected]; +49 69 7565 1249)

[Hairy]

Sorry, but I would have to say that American companies are the masters at this. Just look at AMZN and MSO: two companies which are, basically, crap -- but which just happen to be founded (and in MSO's case, still majority-owned, last time I looked) by former Wall Street insiders.

Don't let Martha Stewart fool you into thinking she's just some pretty cupcake.

Don't let Jeff Bezos fool you into thinking he's some hapless bookseller.

They've personally pulled billions out of these stocks, even though the companies have barely been scraping by for years.