MC Insider: Social pump and dump, vaccine power games, property deals, battle of fund managers, demerger plans, fund-raising whispers and more

This article was originally published on this site

Pump and dump operations in stock markets are as old as the stock markets themselves. But the operators of such schemes are now adding a touch of “social” in today’s digital age. Not long ago, the stereotype of an average midcap stock operator was a flashily dressed gutkha chewing trader, ill at ease with English, and working his phones and trading terminal out of a non-descript office in the suburbs. The rise of the so-called ‘Robinhood’ investors (first-time retail investors, mostly in their 20s and early 30s) in India has simultaneously led to the rise of a new breed of social-media savvy operators, many in their mid-20s, who cleverly accumulate a decent base of followers through some supposed ‘investment insights’ and pearls of wisdom, and then work their Twitter handles cleverly. So here’s the modus operandi: a group of such self-proclaimed stock experts work in tandem, without appearing to be connected. They decide on a stock and then write bullish reviews in relay, creating the impression of many ‘experts’ being positive on the stock. Given the bullish mood in the market, this game seems to be going on perfectly fine. The ‘social’ operators talk up a stock, dump their holdings, and then move on to the next target. So far, they have managed to escape scrutiny because the rising tide is keeping the most mediocre of stocks afloat, even if not lifting them higher.