Thursday, May 14, 2015

Big holders stakes.

From the Edge:

KUALA UMPUR (May 13): Citigroup Global Markets Ltd has emerged as Stemlife Bhd ( Financial Dashboard)’s new substantial shareholder, having acquired a 6.42% direct stake in the stem cell banking firm recently.
Based on a filing with Bursa Malaysia this evening, Citigroup Global had acquired over 15.89 million shares in Stemlife in the open market on May 6, 2015, at undisclosed prices.


When people think about big funds coming into shares, it's a vote of confidence by a big player and bodes well for the stock price.  But can they make the shares go up is another question.  The answer is it depends.

Big players mean that they are less likely to be shaken out by price movements, only if the price moves a lot will they think about moving out.  Generally they will stick to their thesis.

Hedge funds move in and out faster and more prone to price moves.  Normal mutual funds and high net worth individuals have probably made their money by buy and hold so they will likely keep their investments.

Strategic investors likely are in the company for other reasons than price.  They see the potential and will likely not withdraw unless the company goes bankrupt.

Entry of big players will end up having fundamentals shape the trajectory of their stock prices.  If no big players are in, it is harder for the shares to move on fundamentals.


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