This is what happens when you put false floors into a market

gaius c

So no shorting is allowed and AIB shares "soar".
http://www.irishtimes.com/business/sectors/financial-services/aib-becomes-europe-s-most-valuable-bank-1.1568615

State-owned AIB is now the most valuable bank in Europe following a flurry of share buying recently by retail investors here.

AIB’s share price rose by 9.3 per cent in Dublin yesterday to 15.3 cent – roughly three times the level the shares traded at in mid-July. With 520.7 billion shares in issue, this means the Irish bank has an eye-watering market capitalisation of €79.7 billion.

By contrast, Bank of Ireland, which is just 15 per cent owned by the State and is slated to return to profitability before AIB, has a market value of €7.8 billion.

“There’s no logic I can see to the share price at this level,” said one trader yesterday. “I’m pretty sure it’s not worth close to €80 billion. Either it shouldn’t be traded on the market or they should allow it to be shorted, which would sort this out.

“Unlike Bank of Ireland, it was never taken off the list of stocks that couldn’t be shorted from a few years back.”

It's a bit sad to see folk who avoided the property madness jump into a different wealth destroyer. There's a great quote from the Great Depression about the relentless nature of it and how each class of investor was wiped out one by one, until eventually nobody had any cash left. Anybody know who it came from? Really comes to mind when I read stuff like this.

AlekSmart

This is a job for ....The Financial Regulator !!! :eek:

Browney7

I'd love to see who are the people buying these shares. Its been like this for the past few years but has gotten absolutely ridiculous recently.

Fools and their money soon parted. I wonder how much of this purchasing is people thinking "sure they were 20 quid before the crash, they'll get back there eventually" oblivious to the fact that there are billions of shares in circulation

everdead.ie

Just because you can't short the shares doesn't mean they can't go down,
The issue is the small amount of shares actually available to be traded.

Sleepy

Something tells me that this is probably self-perpetuating based on a dodgy diversification algorithm in a trading system somewhere. e.g. something along the lines of "if total share value of company = X then buy Y amount of shares in order to represent the exchange".

andrew

Short selling AIB shares is not banned.

Scofflaw

andrew wrote: »

Short selling AIB shares is not banned.

A remarkably fine example of something completely inaccurate gaining immediate currency. If you were now to try to eradicate the impression that AIB shares are overpriced due to "the ban on short selling", it would probably take weeks or months.

I presume the source of this is the quote from the trader, which is then uncritically reported by a journalist, not caught by an editor, and printed in the national press.

cordially,
Scofflaw

Value Hunter

Share price has dropped roughly 40% since Tuesday, that should wake people up

realitykeeper

gaius c wrote: »

So no shorting is allowed and AIB shares "soar".
http://www.irishtimes.com/business/sectors/financial-services/aib-becomes-europe-s-most-valuable-bank-1.1568615


It's a bit sad to see folk who avoided the property madness jump into a different wealth destroyer. There's a great quote from the Great Depression about the relentless nature of it and how each class of investor was wiped out one by one, until eventually nobody had any cash left. Anybody know who it came from? Really comes to mind when I read stuff like this.

Too true! Words of wisdom are rare these days.