The Folly of allowing a Real Estate Company like Akruti trade in the F & O Segment despite a low floating stock of under 2% is now being realised….The Share Price has crossed Rs 2200 !….Nothing to do with Fundamentals though !
I have covered Akruti in earlier Blogs on August 27,2008 and November 8,2008 warning of Increasing Company Debt and how easy it is for the Company to manipulate the share price when floating stock is so low
90% of the Equity is held by the Promoters and most of the rest by PAC….The company was borrowing unabashedly at high Interest rates recently….A group of speculators shorted this Company big time expecting loan payment defaults….This naked short is now being squeezed badly….Serves you right ,Bears !…you knew the risk when you shorted ! and so must face the consequences…..however the Bigger Issue remains ! How can you allow F & O Trading in a Scrip which has a poor floating stock…..easy to manipulate the share price
In just days the Share Price has doubled as the bears got squeezed….NSE has put the Scrip in ‘Trade to Trade’ and removed it from the F & O Segment…All Open Positions,not squared off will now compulsorily close out on March 26,2009…there will be no rollover…From January,Market Positions Limits had been reached and no new F & O position was allowed…only square-offs
SEBI Teams,two of them,have begun investigating Mumbai and Kolkata Brokers involved in this ongoing Drama
Just a last thought….hope Promoters have not masterminded all of this just to justify creation of this high price deliberately…to provide comfortable cushion and no requirement to top up[ on loans taken or proposed to be taken against pledged shares
Those who have Akruti Shares must begin offloading at Rs 2200 +….The Squeeze will be tightened as March 26,2009 approaches…Offload your stock at every rise….There will come a day soon when the Game will be Over…The Share Price rise too will then be Over and reversal will set in !
By Allowing F & O Trading in Akruti,the regulators and exchanges showed lack of foresight and allowed this Squeeze Manipulation Drama to unfold,vitiating in no small measure the credibility of F & O Markets Operations.Clearly those that control the actual Stock are flexing their muscle here…their numbers are few…and that’s the problem…no floating stock…no trading depth…fewer players…easy to manipulate share prices and create abnormal movements quickly…facilitates Insider Trading
Like who would be foolish enough to short sell Akruti big time,even if fundamentals strongly suggested to do so !…They’ve lost Hundreds of Crores already to those who are applying this Squeeze….So if it was common sense not to be so foolish,then did Promoters mastermind this whole Game plan !