Mug punters determined to lose their money

[JohnD]

"One account under the name Alexander Delarge, which had amassed around 50,000 followers, tweeted a post encouraging users in late January to buy the stock, adding that it was likely to go to $1. “Ill be buying a million shares at a Dollar showing my buy order to keep it going! As we all should!” the user wrote.

Among later tweets by the same account, one showed a screenshot of a portfolio of 5.5m SpectraScience shares saying it had gained 50 per cent in one day, adding: “Let the haters watch when this blasts off!”

It's interesting to note of the stock being pumped "The SEC said social media accounts may have been used in a co-ordinated attempt to “artificially influence” the share price of the company, which does not have a working phone line or website and has not filed quarterly financial results since 2017."
FT.com

U.S. regulators have suspended trading.

 

[footprints]

"OMG nobody warned me about it! The government should refund all the money I lost!"

 

[JohnD]

In totally unrelated news, the prices of Bitcoin and Tesla stock have soared to record heights.

 

[transam]

Did noseall buy any stock

 

[^woody^]

My tip is to invest in CLS, syringes and home office desks.

 

[JohnD]

"The riskiest borrowers in corporate America are making up their largest share of junk-bond sales since 2007 as yield-starved investors hunt for returns and bet on an economic recovery.

More than 15 cents of every dollar raised in the US high-yield bond market has been sold by groups with ratings of triple C or below since the start 2021, a Financial Times analysis of Refinitiv data shows.

That marks the highest share of deals in any year since the eve of the financial crisis, when loose lending standards set off a race by weaker companies to borrow cash."

FT.com

I think I'll start trading my Tulip bulbs soon.

 

[motorbiking]

In totally unrelated news, the prices of Bitcoin and Tesla stock have soared to record heights.

Tesla is on track to be a $trillion company. If ever there is some resetting - it will be here, predicting when is the tricky bit. With that kinda 'cap many problems aren't problems - they are 4 times bigger than VW, Mercedes and BMW combined.

Bitcoin - currency for money launderers and contributor of global warming. cryptos will make the break, but it probably won't be bitcoin.

 

[diy_fun_uk]

In totally unrelated news, the prices of Bitcoin and Tesla stock have soared to record heights.

What gets me about Bitcoin though is there was (and possibly still is) money to be made. Even if it's a bubble destined to burst, if you get out pre burst you can profit. Yes it's with the benefit of seeing past trading figures, however putting fees aside, if you'd invested $1000 6 years ago you'd have received 2.4 Bitcoin for that. If you were off-loading that now and assuming you got rid of 100% for current prices, you'd receive $117,600 or $116,600 profit minus fees.

If it's a bubble and it then burst two weeks later, you've still benefitted.

 

[JohnD]

Tesla is on track to be a $trillion company.

the price of the shares is unrelated to the "value" of the company. They could double, or halve, tomorrow, with no change in quality of products, performance of competitors, profit on sales, or sanity of the founder.

 

[MMarve]

the price of the shares is unrelated to the "value" of the company. They could double, or halve, tomorrow, with no change in quality of products, performance of competitors, profit on sales, or sanity of the founder.

Well actually the price of the shares (multiplied by the number of shares) is the Market Capitalistation of the company so it is exactly the "value" of the company.

Your second point about the quality of products etc can be contributing factors that drive the share price and therefore the value of a company. But ultimately, if you wanted to buy the whole company today, it would cost you the market cap, so that is the current value.

 

[Notch7]

if you wanted to buy the whole company today, it would cost you the market cap

I don't seem to have a spare trillion....maybe not today

 

[JohnD]

"Price and value are the same"

Well that depends, doesn't it?

Is it possible to pay for something, more than it is worth?

I have some magic beans here....

 

[MMarve]

You seem to be getting very confused by this all.

The value of a public listed company is derived by the forces of the market driving the stock price. Now you may think that valuation is wrong, but that is your opinion. Unfortunately, you are one man whereas the market is much larger so they get to dictate that value, not you.

Something is worth what someone is willing to pay for it. So technically it isn't possible to pay more than something is worth because as soon as you complete that transaction, it was valued at that price in that moment. Now that doesn't mean it is still worth that moments later, the value of something can change. In the way a car is no longer what it was worth what you paid for it the moment you drive it off the forecourt, a company can suddenly become worth much less in a moment in the stock market.

That change in valuation may move it closer or further from what YOU think it should be worth, but again that is just your opinion.

 

[JohnD]

Do I believe that a mug punter can get ripped off by paying more for something than it is worth?

Yes I do.

 

[MMarve]

Okay, I don't think I am able to help explain this any more.

What you mean is that a mug punter can get ripped off by paying more for something than YOU think it is worth.

It's all really basic economics, I think I did it when I was about 14 at school.