RE: Last of the sell offs?14 Sep 2020 22:56
Power, IndustrialInvestor will have informed the market makers of say for example Peel Hunt that they are sellers, so Peel Hunt may say we’ll take a million off you at 58p, and protect you in another million at 58p and it’s good for the day.
That way they will try & sell a million that they have taken and if they sell them they will then try and sell the other million.
Why they say ‘protect’ is both parties have pre-agreed the price for the second million.
So Peel Hunt are only obligated to buy a million, but the seller would be obligated to sell them another million should they have buyers.
This weighs on the market because they have the seller, they just need the buyers.
Once the stock is sold they need to find sellers if the buyers are there, and hopefully they raise the bid to find the stock, or doing the ‘tree shake’, dropping the price to try and shake nervous holders to sell, or hit their stop losses.
But logically you would expect when they sell the remaking 75m shares it would be easier for the price to rise.
There will probably be institutions building up stakes in AML now, just doing it slowly & patiently so they don’t make the price jump.
By selling stock this way they can report the sells at the end of the day.
The big hope is Mercedes are increasing their stake from 5%.