Since we're in the Garage and seeing how we can post our close interests here, I wanted to share a bit about how investment firms make money by putting a company out of business. I think I know what you're thinking and yes, you would be right. I too never thought you would want to put a company out of business. Isn't that the antithesis of what they teach in Harvard Business School? Yeah probably, but don't they also teach how to make money and if we can make money by helping a company go bankrupt, then all the better. (Insert "I Declare Bankruptcy!!!" scene)
There are two main ways to make money when a publicly traded company is in trouble.
1) The first is to short the stock into oblivion (known as Cellar Boxing) with FTD's (Failure to Delivers) and the...
2) second is to raid the company for it's assets while collecting huge salaries and bonus' for doing so.
Shorting the stock is a way people make money when the stock price goes down. The lower the better. This is where I would like you to watch some videos by other teachers who will explain these concepts better than I can. I just hope I can organize them into a digestible\educational process format to bring your knowledge about this subject up to speed. Please enjoy learning and don't get mad at me, I'm just the messenger.
Now that you have an idea on how we can make money when a stock price goes down, let's put that concept and put it on STREOIDS. Imagine you are a Hedge Fund or Stock Broker Dealer and you target a weak companies stock for shorting. Take Sears or K-mart (2 for one deal) as an example. Here is how you go about shorting a stock through "Cellar Boxing" <<< Click that link and read the article
knowing then when the stock is shorted you collect the money and NEVER have to buy it back when the company goes bankrupt. Free Money!!
Is your mind blown yet?
I know, mine was also.
Here is how the Hedge Funds and Broker Dealers accomplish this cellar boxing through FTD's (Failure to Delivers).......
Enter the Meme stocks, specifically GameStop but also the likes of AMC, BlackBerry and Bed Bath and Beyond to name a few. Click this link here and then click on the MAX button to see the volatility of GameStop's price.
If that doesn't look manipulated to you then I don't know what does. The problem with GME (GameStop ticker symbol) is that this time, the shorting hedge funds got caught with their hand in the proverbial cookie jar. They massively shorted the stock, with no intention to buy the shares back and the likes of Robinhood investors bought in while continuing to hold their shares. The company raised new capitol, to the tune of 2 BILLION dollars, by selling shares and has little to no debt!!! A company can't go out of business with a balance sheet like that.
Now not all of these are worth a look or should you even put into. We're just learning about what's going on in todays stock market. But how about we take a look at the 1929 Stock Market Crash and see if it looks like what we are seeing today. I know that I am diverging here but man this is an interesting subject. Click at your own leisure here but to stay on track with the main subject, just keep reading/watching and come back to the documentary.
Now I mentioned a second way people make money by helping to put a company out of business. That is 2) second is to raid the company for it's assets while collecting huge salaries and bonus' and even the company itself for doing so. The videos below will show what happened to Sears/K-Mart (2 for 1 deal--remember when Sears bought that crappy company K-Mart?) , Toys R Us and Radio Shack.
I remember watching Eddie Lampert sell off all of Sears assets like Die Hard batteries, the Craftsman tool brand and Kenmore appliance brand and and and.... then paid himself a "salary" of $1 but also in stock---this avoids taxes because you don't have income. All the while....
"Although current Sears shareholders have lost almost their entire investment, tens of thousands of employees have lost their jobs, and creditors — including the U.S. government — and others are owed $11 billion, Lampert has still made nearly $1.4 billion to date from his Sears investment, a number that has never been calculated before."
Ok, let me wrap this up by linking the 3 videos below of the companies that people helped put out of business: Sears, Toys R Us and Radio Shack. But before you watch those videos, please don't get the wrong impression of investing in the stock market. Listen to the likes of Warren Buffett and invest in great companies to help supplement your retirement income like savings and Social Security. Now to the 3 videos....
There are two main ways to make money when a publicly traded company is in trouble.
1) The first is to short the stock into oblivion (known as Cellar Boxing) with FTD's (Failure to Delivers) and the...
2) second is to raid the company for it's assets while collecting huge salaries and bonus' for doing so.
Shorting the stock is a way people make money when the stock price goes down. The lower the better. This is where I would like you to watch some videos by other teachers who will explain these concepts better than I can. I just hope I can organize them into a digestible\educational process format to bring your knowledge about this subject up to speed. Please enjoy learning and don't get mad at me, I'm just the messenger.
Understanding Short Selling
Now that you have an idea on how we can make money when a stock price goes down, let's put that concept and put it on STREOIDS. Imagine you are a Hedge Fund or Stock Broker Dealer and you target a weak companies stock for shorting. Take Sears or K-mart (2 for one deal) as an example. Here is how you go about shorting a stock through "Cellar Boxing" <<< Click that link and read the article
knowing then when the stock is shorted you collect the money and NEVER have to buy it back when the company goes bankrupt. Free Money!!
Is your mind blown yet?
I know, mine was also.
Here is how the Hedge Funds and Broker Dealers accomplish this cellar boxing through FTD's (Failure to Delivers).......
Failure To Deliver (FTD) - Where are the stocks?
Enter the Meme stocks, specifically GameStop but also the likes of AMC, BlackBerry and Bed Bath and Beyond to name a few. Click this link here and then click on the MAX button to see the volatility of GameStop's price.
If that doesn't look manipulated to you then I don't know what does. The problem with GME (GameStop ticker symbol) is that this time, the shorting hedge funds got caught with their hand in the proverbial cookie jar. They massively shorted the stock, with no intention to buy the shares back and the likes of Robinhood investors bought in while continuing to hold their shares. The company raised new capitol, to the tune of 2 BILLION dollars, by selling shares and has little to no debt!!! A company can't go out of business with a balance sheet like that.
Now not all of these are worth a look or should you even put into. We're just learning about what's going on in todays stock market. But how about we take a look at the 1929 Stock Market Crash and see if it looks like what we are seeing today. I know that I am diverging here but man this is an interesting subject. Click at your own leisure here but to stay on track with the main subject, just keep reading/watching and come back to the documentary.
Now I mentioned a second way people make money by helping to put a company out of business. That is 2) second is to raid the company for it's assets while collecting huge salaries and bonus' and even the company itself for doing so. The videos below will show what happened to Sears/K-Mart (2 for 1 deal--remember when Sears bought that crappy company K-Mart?) , Toys R Us and Radio Shack.
I remember watching Eddie Lampert sell off all of Sears assets like Die Hard batteries, the Craftsman tool brand and Kenmore appliance brand and and and.... then paid himself a "salary" of $1 but also in stock---this avoids taxes because you don't have income. All the while....
"Although current Sears shareholders have lost almost their entire investment, tens of thousands of employees have lost their jobs, and creditors — including the U.S. government — and others are owed $11 billion, Lampert has still made nearly $1.4 billion to date from his Sears investment, a number that has never been calculated before."
Ok, let me wrap this up by linking the 3 videos below of the companies that people helped put out of business: Sears, Toys R Us and Radio Shack. But before you watch those videos, please don't get the wrong impression of investing in the stock market. Listen to the likes of Warren Buffett and invest in great companies to help supplement your retirement income like savings and Social Security. Now to the 3 videos....
