Italian Regulator Responds To Plunging Saipem Stock: Bans Shorting
January 31, 2013 - 11:33am
Yesterday the stock of Italian offshore oil services company Saipem SpA imploded nearly 40% after the company said it expected 2013 net profits to be, oh, just around 50% below current consensus. In other words, merely another case of irrational investor exuberance where actual corporate cash flow is orders of magnitude below where the sellside expected it to be, and so indicative of what happens every time hopium collides with reality (and, tangentially, is the real valuation case for most public stocks were they to report real, not GAAP-massaged earnings). Only in this case there was a lot of hopium, because none other than Bank of America placed some 10 million share of Saipem stock at €30/share just hours ahead of the news release that sent the stock crashing! Nothing like getting a 40% wipeout minutes after naively believing the lies from the most incompetent bank of all time. "T...
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