Rolling Stone Reports that Naked Short Selling Killed Bear Stearns and Lehman Brothers
Posted on 01 October 2009 by Mark Mitchell
Matt Taibbi has published a story in Rolling Stone magazine that nobody should miss. It’s not yet available on-line, so you’ll have to pick it up at the newsstands, but here’s a quick summary.
Taibbi writes:
“On Tuesday, March 11th, 2008, somebody – nobody knows who – made one of the craziest bets Wall Street has ever seen. The mystery figure spent $1.7 million on a series of options, gambling that shares in the venerable investment bank Bear Stearns would lose more than half of their value in nine days or less. It was madness – “like buying 1.7 million lottery tickets,” according to one financial analyst.”
Bear’s stock would have to drop by more than half in a matter of days for the mystery figure to make a profit. And that is what happened.
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