Dell: Signs of Insider Trading

From Marketwatch:

Dell's release slipped out about three minutes before the market closed Thursday, giving the company's shares a boost of 98 cents, or 6.7%, to end at $15.65. The stock topped $16 ahead of Friday's opening bell.

Really? Three minutes? You sure about that, Marketwatch?

This is about as blatant as it gets - a huge ramp, on huge volume.

"Someone" (or a bunch of someones) had that report 17 minutes before the bell, and if you were one of the "chosen few" you had a "high frequency" 14-minute window to loot the joint - again.

This sort of scam is so "in your face" that it leaves open not only the question of whether there are any cops (answer: No) but also whether one should have any confidence in our markets as a fair place for people to invest (again: No.)

In a nation honoring the rule of law this sort of trading pattern would result in an immediate investigation and a literal blizzard of subpoenas within minutes.

But we don't live in that sort of nation, do we?

Comments

[LIVE FREE O...:]

It would seem that anything goes these days.

I would say the "the Dell website mistake" was blatant and shameless but this days, almost everything related to wall street (and of course the government) is blatant and shameless.

Time to grab some nachos (salsa & cheese) and a coke, sit back in a comfortable chair and watch the market CRASH!

Aug 28 12:28 PM

[Max Profit:]

Karl...you must have been short on Dell! Don't be so sore at Dell for delivering GOOD news for a change just because you were betting the other side.

This has happened before with other companies when there had been signs that pre-leased news (which was supposed to be bound by a an embargo period) had started to leak-out. It becomes the moral responsibility of a company to immediately make the news public to eliminate the exact funny business that you are blaming Dell for. You should be looking for the agencies that broke the embargo!

Aug 28 12:39 PM

[Pessimistic...:]

I see so many Dell ads for damn good bargains. That, with the good news from Intel and the fact that it is back to school season ... to me , that spells pop. The thought is to get in and out before Dell realizes this market is ready for a decent correction. My gut says 10% minimum to level the playing field. I look at either of my portfolios and they both have made an average of 22%! Yes I have snitzled my profits and am now sidelined for the next upswing. It is no secret and it is blatently obvious you see this type of movement over such a short period of time. These are five year moves folks! take some off. Does the statement too far too fast ring chrystal clear yet? I am now liquid in both accounts and patiently waiting.
Hell I feel so good about gaining back a little of what i lost that if I do not get in at next drops bottom, I know I will be ok just by what has just happened. As also was stated I will accept missing trhe first 10%, climb on for the next 40% and sit out the top 5%. No pressure to make bigger mistakes and be greedy.
good luck folks!

Aug 28 02:51 PM

[expat in China:]

they miss the point Karl!

Aug 29 07:44 AM

[daniel3582:]

What a childish comment.


On Aug 28 12:39 PM Max Profit wrote:

> Karl...you must have been short on Dell! Don't be so sore at Dell
> for delivering GOOD news for a change just because you were betting
> the other side.
>
> This has happened before with other companies when there had been
> signs that pre-leased news (which was supposed to be bound by a an
> embargo period) had started to leak-out. It becomes the moral responsibility
> of a company to immediately make the news public to eliminate the
> exact funny business that you are blaming Dell for. You should be
> looking for the agencies that broke the embargo!

Aug 29 09:42 AM

[Karl Denninger:]

Of course they miss the point.

And no, I was not short DELL; the above comments apparently forget SA's requirement that if I have a position in a security I discuss that I disclose it!

On Aug 29 07:44 AM expat in China wrote:

> they miss the point Karl!

Aug 29 09:58 AM

[Michael Clark:]

If the stock market is a casino owned and run by Goldman Sachs then they at least need to advertise this, and have naked girls, and gay men who play with lions, and French acrobats.

We need to know what we're getting into; and getting our of this new casino.

Aug 29 10:33 AM

[Michael Clark:]

Sorry, I forgot: Karl, very good post. It's pathetic what we are sinking into now. Perhaps it's always been this way, and we just didn't notice.

Aug 29 10:35 AM

[casey00001:]

I agree this does sound fishy. But what do you want to do about it? Have Emperor Obama appoint another Czar?. I will take free market captialism with its flaws any day.

Aug 29 11:08 AM

[TeresaE:]

You forgot free drinks.

I think we all need some free drinks at this table!


On Aug 29 10:33 AM Michael Clark wrote:

> If the stock market is a casino owned and run by Goldman Sachs then
> they at least need to advertise this, and have naked girls, and gay
> men who play with lions, and French acrobats.
>
> We need to know what we're getting into; and getting our of this
> new casino.

Aug 29 07:13 PM

[TeresaE:]

Dell, more "great" news that equated to many lost American jobs (Dell's and suppliers).

How long can we continue to gut our customers and think recovery is around the corner?

Thanks for keeping eyes open Karl

Aug 29 07:14 PM

[Mark Bern:]

You may have missed a few things that have become very apparent to many here on SA. The big one is that there is heavy manipulation by a few of the markets. And when a small group of investors gets information ahead of the rest of us, it is ILLEGAL and a breach of fiduciary responsibility. These factors are never part of a "free market capitalism" model by any stretch.

The point of the article is that we have lost the free portion of the capitalist model in equities. I am not short Dell nor am I crying over spilled milk so don't assume that I missed the run up. I, along with many others here have noticed that the markets are no longer a place where logic or information is evident in the market trends. It is no longer a "fair" level playing field because a few very wealthy individuals and a few major trading desks have more information earlier than the rest and they have more control over the daily machinations of the market. There was a time in America that if a group were to manipulate a market (think Bunker Hunt and silver), it was considered a criminal offense. I suppose that if you are lucky enough to have made some money then you consider it okay now. Well, whether I make money or lose money is not the point. I just want the odds to be equal for all players and let information, intuition, analysis, etc. have some basis for being right.


On Aug 29 11:08 AM casey00001 wrote:

> I agree this does sound fishy. But what do you want to do about it?
> Have Emperor Obama appoint another Czar?. I will take free market
> captialism with its flaws any day.

Aug 29 08:10 PM

[SivBum:]

Insider trading, folks trade on leaked material info ... Countrywide, Meryle Lnych, AIG etc...all those violent swings had made a selected few tons of money. The crooks are cleaning small investors' clocks. Look at Option Repricing scams, nearly all the high tech companies did that. You can count those who are in jail with fingers on one hand.

Aug 30 08:20 PM

[User 479524:]

Karl:

While I am agree with you that "someone knew" the DELL earnings in advance, I am convinced that this is ALWAYS the case. I would like to point out that not ALL runups before Earnings are a sign to Buy. For instance, in just the past 2 weeks runups occurred in SHLD, PETM and DE before their earnings release, but they all gapped much lower after the release.

Steve R.


On Aug 28 12:28 PM LIVE FREE OR DIE wrote:

> It would seem that anything goes these days.
>
> I would say the "the Dell website mistake" was blatant and shameless
> but this days, almost everything related to wall street (and of course
> the government) is blatant and shameless.
>
> Time to grab some nachos (salsa & cheese) and a coke, sit back
> in a comfortable chair and watch the market CRASH!

Aug 30 09:16 PM

[Hephasteus:]

And just think. Those "insiders" got the wonderful privelage of buying up a HFT pumped stock that will crater before long. Woot. What a lucky lucky day for them.

Sep 04 01:51 PM