We Don’t Require an Uptick Rule
This is a unproblematic issue.
It applyed to be that you couldn’t inadequate a stock unless there was an uptick. The idea was that this uptick rule would keep inadequate sellers from piling on a stock and laboring the price down. So the uptick rule was removed. It got permissable to take up shares of stock and trade them whether or not the stock had clicked up or not. The result ? Nothing. Not a darn thing modifyed.
Well companies operated on their companies good. They recognised that little sellers just now made succeeding demand for their stocks. If they forced the price down to young lows, it exactly produced an opportunity for investors to purchase the company at inexpensive prices. Hence be it. Dear companies aren’t defined by their stock prices, they are defined by their operations.
On the flipside are badly handled companies. Badly carryed off companies ever take for granted the current business environment will abide the way it is. The heavy investment banks opined they could ever lift capital and deploy it at higher returns. Which is a swell model to pry up to mash every potential nickel out. It forms it well-heeled to catch your bonus and constitutes shareholders who but devote attention to the stock price well-chosen.
Except that leverage is risk. E’er has been, e’er will be. When you dont handle your risk easily, you give the consequences.
The problem with the likes of Lehmans, Bear Stearns et al, wasn’t that their stock prices were forced down, it was that they had suited unforesightful and excessively leveraged. They had not debated all potential negatively charged scenarios. When they were thrust to compose down assets and couldnt take access to loans because no one commited their balance sheets, they were without capital. When they were without capital, they were SOL. Deleveraging fetched their intact business models going down down on with their stock prices. Lehman went away, the rest produced government bailouts or were born on to be corrupted out.
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