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Old 13th August 2012, 01:32 AM
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Default Who are These Sellers?



When a company posts record profits and the volume and price go through the roof, who are the people who are happy to sell when the price is (almost) certain to go up? I realise that people might need money etc. etc. Or are they big-timers selling some of their stock at small, slightly higher prices so that the majority of their stock will also go up in price?
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Old 13th August 2012, 08:24 AM
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Usually people sell because they feel the stock is fundamentally overvalued or technically overbought.

Record profits don't always lead to record stock prices.

If the price of the stock already discounts its record profit, the stock may not go up or even come down after the results.

See this thread:

Bull Markets, Bear Markets and Investing
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Old 13th August 2012, 10:34 AM
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Thanks Alchemist

I can understand if it is overvalued. But, take Satyam for example. It posted above-forecast results. It is not overvalued as far as I know. Everybody appears to be bullish on the company, if not the segment. It still went up by 9% in the first hour of trading.

Let me spin it this way. I can understand that when people want to sell a bad stock, they find no buyers. But, when people want to buy a good stock, have there been any exemplary situations where there have been no sellers at all? (I'm not talking about bulk-buying here).
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Old 22nd August 2012, 11:34 PM
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Quote:
Originally Posted by DineshV View Post
It is not overvalued as far as I know.
and how exactly do you know that it's not overvalued?
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Old 24th August 2012, 05:30 PM
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These smart people may be insiders or concerned people keep on accumulating till the the news comes in general public.

Once the news comes to us they sell.

So easy!
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Old 1st September 2012, 05:40 AM
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Quote:
Originally Posted by rahulsk View Post
and how exactly do you know that it's not overvalued?
A more or less debt-free company. Its then price was around 13% of its price before its fall. Relatively few of its clients jumped ship and it roped in more. Compared to all its competitors its book value is very low etc. etc. There also appears to be a lot of positive sentiment about the company (now).

If I'm talking out of my rear end here, please correct

Quote:
Originally Posted by ashish_jain11 View Post
These smart people may be insiders or concerned people keep on accumulating till the the news comes in general public.

Once the news comes to us they sell.

So easy!
The stock was going up until a couple of days ago and I suspect that it'll start its engines yet again soon. It's still around 14% higher at the moment when compared to its value pre-results.

I noted recently that some smart mob played with Claris Life Sciences recently and had advance knowledge of the US FDA clearance for one of its products. I can understand that when such information is unavailable to sellers, that they won't be too concerned about selling. But when I see that a company has declared bumper results, I don't understand where all the sellers are coming from.

Or is it the company itself selling shares? I find this tough to understand!
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