Possibly a bigger scandal is following Hyundai’s MPG brouhaha: There is a stench of insider trading. “This smells pretty bad,” Robert Boxwell, director of consulting firm Opera Advisors in Kuala Lumpur who has studied insider dealing patterns, tells Reuters.
On November 2, 2012, it was announced that Hyundai and Kia had overstated the fuel economy ratings on many of its cars. Not surprisingly, the Hyundai share did a nosedive on the news. However, the stock had already cratered before the announcement. The stock fell 4 percent on November 1 with about 2.2 million shares changing hands, the highest trading volume of the year at that point.
Some say, it is par for the course at Asian bourses. “The idea that insider trading is wrong rather than smart is only being ingrained in the current generation of Asian players, not the older generation who are often still in the driving seat,” said Peter Douglas, founder of GFIA, a hedge fund consultancy in Singapore, told Reuters.
The stock fell on well-publicized rumors that there would be some sort of bad news, prior to the official EPA announcement.
Note the date of this article: http://www.reuters.com/article/2012/11/01/us-hyundai-stock-idUSBRE8A003X20121101
But the rumors were caused by the insider trading in the first place, as the information was distributed among the said insiders and it leaked.
No no no no no no – they are an Asian car company hence they did no wrong.
Somewhere, out there, right now, a Chrysler worker just lit up a big Bob Marley grade fattie.
The horrors…the horrors……………………………..
“But the rumors were caused by the insider trading in the first place, as the information was distributed among the said insiders and it leaked.”
If the rumor was so widespread that it could cause the stock price to tank and news of the rumor could end up in that day’s news, then that would suggest that the rumor was outside in a wide open field with a billboard and neon sign attached to it.
Stock traders try to beat the future by getting ahead of the news. Hence, the slogan “buy the rumor, sell the news” — the market leaders process most information before it becomes official, then get out of the trade once they know for sure what the news is.
Slow news day…
“If it walks like a duck, and smells like a duck “
It’s a witch! BURN HER!!!
//sorry
Coming soon the 1st year Hyundai Newt; it’ll get better
Some people will see conspiracies in just about anything…
I think there’s more to your comment than you’re letting on…
Just because you’re paranoid doesn’t mean they aren’t out to get you.
What caused the fairly significant dip on the 24th of October? Why did the slide pause before its big drop on Nov.2?
Why a duck?
Say the secret word and win a hundred dollars.
Complete BS. For a credible analysis, you need to prove:
1) Other car companies didn’t drop at that same time. If they did, that must be due to a common risk, such as fiscal cliff blah blah.
2) The drop is substantially greater than the typical volatility of that stock. Analyze the volatility for the past 5~10 years, map a volatility index vs. chance of insider trading graph.
I’m not necessarily agreeing with the analysis…but I’m pretty sure they are looking at the trading volume ahead of the announcement not the actual stock price.
PCH did show a rather plausible explanation as rumors of ‘bad news’ were being carried by news wires. Others have said the news stories may have been driven by the high selling activity on the stock.