QUOTE (Ellz @ Nov 18 2008, 08:44 PM)

QUOTE (Parthiban @ Nov 18 2008, 08:19 PM)

Btw, it's not a rumour, Porsche have taken over the VW Group - that's what almost caused even more chaos as those stupid traders (who will never learn) starting their version of gambling on it, until Porsche stepped in to clean it up and prevent a further crunch.........
Didnt know that I thought that was something else when a load of traders lost millions ? Got any articles on it wouldnt mind a read up

A 5 second nutshell - hedge funds borrowed huge numbers of VW shares, believing the price of the shares would fall, and then sold them. The huge influx of shares into the market caused the price to drop. The idea of this, known as shorting, is that they can then buy the shares back, return the shares to their original owner, and pocket the difference between the price they sold them for and the price they bought them back for.
What they didn't know is that at the same time, Porsche were quietly buying up large numbers of VW shares, to increase their stake in the company. That then caused a shortage, and the price rocketed. Unfortunately for the hedge funds, they had to buy the shares back at a sharply increased price, meaning that instead of pocketing the difference they had to pay out vast sums of money to buy enough shares to cover their original positions.
All quite amusing, really.