Quote:
Originally Posted by domer2
A: his dad started a buyout rumor, got a friendly analyst to upgrade the stock immensely, and started buying the stock, the combination of which sent it flying upward.
this in turn triggered an SEC investigation, and all of this apparently happened in a single day which was very lol as this would play out over weeks or months. obv what the father did was highly illegal, as is what Axe did shorting the stock with material, inside information.
(there are parallels in this episode to an actual real life short/long battle, minus the illegal stufff. a company called Herbalife is being shorted by one of the most famous hedge fund guys who calls it a ponzi scheme, and a rival hedge fund guy who doesn't like him got a huge position in the stock and took a board seat, which triggered a bit of a short squeeze and a lot of pain for the first hedge fund guy)
B. this would never really happen to a hedge fund of his magnitude, and yes if it ever were to happen, they could simply put up more cash. but the show got around that by claiming that their prime broker was being forced to do it by his by boss, presumably at the behest of the dad.
edit: and they also said his firm was highly leveraged, which would make this slightly more realistic, as it greatly magnifies any big moves in one of your positions.
awesome ty.
I was only paying pseudo attention so totally missed all the stuff with his dad and the analyst and buy out rumors heh.
one last question tho, what deal did he have to make with the dude he borrowed the stock from and why would the guy let him borrow it instead of making him buy it or whatever once he finds out the one and only axe is so certain it's gonna tank?
wouldn't that dude want to gtfo of his long position while the getting was good?