General Question: If we buy shares of a company and it goes bankrupt and owes lot of money to banks or financial Institutions (1000’s of crores). Will we be liable to pay back this money as share holders, can banks send us notice or drag us to court ? can they claim anything from us legally ?
Kindly let me know, if you have any information on this. Thank you.
Short Answer, No.
You don’t owe anything to anyone.
Can we have some information form volume?
can we use it to find any manipulation in stock price?
Stock hitting upper circuit with low volume (should we take such movements seriously?)
What volume is considered considerable?
I have heard that some stocks are operated or manipulated. Is there some book or article on how to understand if and when stocks are being operated?
Sorry, if this question is not permitted in the forum. I am a new member.
Your liability is upto the amount invested in the stock. No one is going to come after your personal property. That is why we have companies. To legally differentiate between personal and company assets.
When a company goes bankrupt, the creditors of the company (to whom the company owes money) stand in line while the assets of the company are liquidated.
What happens to the debtors of the company (those who owe the company money). Are they required to pay the entire 100% of the money they owe to the company?
There is no trading outside normal hours (unless the stock is listed as an ADR on US markets. Like Tata Motors or Infy).
While the market opens at 9AM, no actual trading happens then.
These 15 minutes of time is considered to be most volatile of the day. This is because the market is digesting facts since close of last trading day to present time. Huge gap ups/downs which cannot be held are seen very frequently. For a stock as liquid as Cipla, I wouldn’t dare to say that manipulation is going on.
When it comes to indexing, there are 2 options
which will work out cheaper ? Anyone has any experience in this comparison.
Hi @Mayank.mail and @starpointer97,
Thank you for your replies to my question about Cipla share price movements. You both make references to possible price manipulation, but I don’t understand what purpose this would serve. E.g.
What big player? What motivation could someone have to drive the price up momentarily? Similarly…
I’m not sure how to parse this sentence, but you mean that manipulation may be going on? If so, to what purpose?
@starpointer97, thank you for the information about what happens to the market preopening. To be clear, you are saying that no actual execution of orders happen before 9.15 am? My broker told me that morning that the price was 699 just prior to the markets opening, though. And in any case, I don’t understand how such a big swing could happen. Doesn’t it mean that a lot of shares are being bought and immediately sold? Seems strange to me.
I mean it is extremely difficult to manipulate a stock like Cipla. It is widely tracked with large order book. So, for anyone to manipulate it will have to fight against the might of all the people tracking the stock (which includes Hedge Funds, Mutual Funds, Foreign Investors). So, for a large stock like Cipla manipulation is very difficult.
On the other hand, if you are talking of a very small stock (let’s say like Broadcom Group), which has, maybe a few crores worth of shares being traded daily, the stock can be pumped and dumped.
The purpose of manipulation is the same as any other stock trading strategy - to make money. By pumping the stock price up, the operators lure retail investors who think they can make easy buck. To do this, the operators constantly keep buying the stock to provide support and give a false sense of optimism towards the stock. Once the stock reaches a price they want, they dump their holdings at the expense of those who were lured in.
Hi @arjunbadola,
I don’t have any investing experience, so take this for what this is worth.
But common sense would tell you that a large well-established company’s share price is going to be less volatile than that of a small company. Its price is less likely to collapse, but it’s also less likely to go up dramatically. And if it goes down, it’s generally in a better position to recover over time.
On the other hand, a small company’s share price may go up dramatically over a relatively short period of time, On the other hand, the share price is much more likely to drop dramatically, since small businesses are more fragile than large businesses. But the bottom line is that you really need to study each company individually when making investment decisions. One cannot generalise.
I suggest you do more reading and studying before making any decisions. This site is a good place to learn.
Thank you but I would like someone with experience to answer. Cheers!
where can i get annual report from 2000.
Hi,
I’m not really from a finance or accounting background. Hence I’m still trying to understand how various ratios and metrics are related to each other. Although I didn’t read this equation anywhere but just thinking about it from first principles leads me to following equation:
RoA = ATR * NPM
Where
RoA = Return on assets
ATR = Asset Turnover Ratio
NPM = Net Profit Margin
Would like to know from other member whether this seems reasonable or not. If it does, this would also imply that investors only need to worry about 2 out of these 3 ratios since the third one is fixed.
Hi Investors,
I am going through AR of Sterling Tools Ltd and i came across below in Contingent liabilities and other commitments… can you help me understand the below and its impact on company
Hi guys!
Just a small question, how long does it take for the listing of a NSE SME company on the NSE Mainboard?
The company has received the approval from the exchange a couple of days ago. When should I expect it to list on the mainboard?
Thanks!
I have been tracking companies with net of cash > market cap and also underlying business making free cash flow. One such company is Elnet Technologies (easy business of renting IT park of 1.7 lakh sq.ft build-up which is 100% occupied in Taramani and no more expansion) in which 26% is owned by state govt of Tamilnadu.
The shareholding pattern in March-2018 was as follows :
It is to be noted that Shanmugam Thiagarajan sold his 9.24% stake to IDBI bank at approximately Rs 160 / share (average).
Now in March-2020, again IDBI bank sold this 9.24% stake back to Shanmugam Thiagarajan when share price is Rs 90 (average) in this quarter.
When it is clear that ELNET’s mkt cap is 35 Cr against the intrinsic value is 129 Cr(cash = 45 Cr and 6 times EBITDA of 14 gives EV = 84 Cr).Why IDBI (DII in this case) is involved in such a transaction which is worth a mere 3.2 Cr considering its networth but profitable for the Shanmugam (Promoter) ?
Is it not that IDBI, a PSU, is questionable for such a deal, buying high and selling low to the same individual promoter deliberately? I request experienced investors to throw some light.
I have a question on investing in PSU Companies. Are there instances in the history of NSE/BSE where PSU companies and have gone bankrupt and Goverment has failed to bail out?
Why would you want to go for option2? SBI’s Nifty ETF has a 0.01% expense ratio only and has a huge AUM.
For option 2 you need to keep in mind that due to the prices of different stocks it is close to impossible for someone to manage buying in the same ratio. A Nestle stock is for 17000/- while an ITC stock is for 200/- and ITC has more weightage in Nifty.
