6 thoughts on “Crown Restored

  1. Mugi

    While the 8shs deal completely distorted Crown’s share price, it was within the rules. It is highly likely that there was mischief BUT, the drop was within the rules!. As the rules stand, any share can drop to 1sh after an announcement as long as a trade is done. Unless CMA has evidence of foul play, they should not have relaxed the 10% rule to allow Crown’s share to rise. IF indeed there was mischief, as we all suspect, the broker should be named, shamed, and heftly fined. This should be a wake up call for CMA to set a max’ movement limit – say 20% – for any share after an announcement. Otherwise, market capitalisation may become a daily guessing game

  2. Anonymous

    Hmm, 50% loss/gain..

    I dont have any facts but this whole thing smells like rotten fish. Could be another scam right in front of our eyes…

    Who sold just before the price went down? Did the same person (directly or indirectly) buy when price hit rock bottom?

    Some serious shorting could have taken place!!!

    Who is (probably – but not necessarily) selling now that price is up? Did the same person buy when the price was low?

    Why did CMA make an exception in this particular case? What were the specific extenuating circumstances?

  3. bankelele

    Coldtusker: kudos to CMA for stepping forward and correcting

    Mugi: the rules are there, and we all agree that it was mischief, which should be investigated further; the matter should not rest now that the price has been restored
    – How will 20% help matters? There are no secrets in this market that an announcement would send a share up (or down) that much

    Ssembonge; at a time when they are trying to woo more companies to the NSE, a phantom trade that almost wiped out 80% of the value of a 50 year old company was something that had to be addressed

  4. Mugi

    It is good the CMA is doing investigations and they have decided to refer to the 8shs transaction as “erroneous”.

    Setting a limit on price movement, for example, 20%, will limit the impact of an “erroneous” transaction after an announcement or event and not lead to huge drops, or rises, a listed company’s market capitalization.

    I have searched the JSE and NYSE websites but cannot find limits on daily price movements etc. Anyone with knowledge of these rules in these or other markets?

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