Mergers Trigger Unethical Stock Manipulation
WHO IS BUYING WHOM?
by Bob Moneymaker
The BUYER'S stock gets pushed down, as the Money-Elite work together to rip off the Little Investor.Check out the Stock Records for AT&T (T), AOL, (AOL) and ScanSoft (SSFT).
The Elite, who have large investments in the company being bought --MediaOne,TimeWarner, Caere-- make the buyers' stock go down,( by "selling short"), so the holders, of the stock of the firms being bought, get exhorbitant prices for their shares.
[SHORT-SELLING is where a person borrows large blocks of shares, promises to repay the stock, later, sells the shares at a high price, and then repays the borrower, with cheaper priced shares, he buys, after his selling of the large blocks of stock drive the shares' prices down.]
In the case of Caere, a large block of shares--2 million shares--was purchased just before the merger with ScanSoft was announced.
ScanSoft went down dramatically after the merger announcement, as did AT&T and AOL.
AT&T dropped 40% from a high $ 50's to the low $ 30's.
ScanSoft went from over $5.00 a share to less then $3.
AOL went from $85 a share to $ 55 a share.
This is not a co-incidence !!!!
The definition, of "who is buying whom", is the real question. The stockholders of the companies being sold get enormous amounts of stock and dollars for their shares, from the companies buying.
(That way they get enormous leverage, as major stockholders in the survivor.)
Time Warner and MediaOne and Caere stockholders get more stock and dollars because their stock prices stay up--Time Warner now gets two shares of AOL for every share of TimeWarner, instead of just one, as they would have, at comparable prices before the merger.
MediaOne gets more, since AT&T was pushed down to $32 from $57.
One Caere stockholder got $6000 and 2230 shares of ScanSoft stock for 500 shares of Caere.
(Go figure, what the 2 million share-block buyer got.)
****UPDATE****
July 26, 2000
Each share of MediaOne stock is being exchanged
for 1.4912 shares of AT&T, plus $ 8.50.
This will cost AT&T 606 million shares and $ 23 billion.
Who is buying whom, here?
We contend that this practice of depressing the "buyer" company stock, so the seller company shareholders get more value, has been a 'Street" tactic for years.
Do you think it is ETHICAL?
Does the Federal Securities & Exchange Commission even attend to such practices, or monitor it's use.
Since, only the Big-Money-Boys can muster the large sums of money needed to execute this power-play, it is unfair to the average investor and should be highly regulated, if not outlawed, all-together.
Money Talks.
