Change in substantial holding

[ChaoSI]

Now, i obviously know what this is referring to, however!

I just never know what to expect (wow.. gee sums up my whole experience with the stock market ).

now i'm sure that there are no hard and fast rule about how substantial holdings changes affects share price but I just wanted to pick your brains about what you've noticed in the past?

I've seen these announcements a bit, and sometimes they make the sp skip up, sometimes nothing happens....

so in the same way that during dividend payout time the sp goes down by the amount paid out,
what tends to happen when there are changes in substantial holdings, up or down?

thanks in advance =)

 

[KurwaJegoMac]

I've seen these announcements a bit, and sometimes they make the sp skip up, sometimes nothing happens....

This about sums it up nicely. There are no hard and fast rules for substantial holdings, however it does raise some general questions depending on who is the substantial holder.

For example if the director of a company called ABCDEF sells the majority of their stake, you need to ask yourself why? You'd expect them to have detailed and intricate knowledge of the health of their company. If they're not confident in it to maintain a large stake why should you be? (This is of course but one example - the director could be retiring or got hit with a margin call or who knows).

It's too varied to tell what would happen but generally if they're buying you might see an unsustainable spike during the day and possibly the next before reality kicks in and it plummets back down. You'll find a lot of people buy on news of a new/increased susbtantial holding. That being said if Insto's are picking up substantial holdings it's usually a positive long term support for the price (will not necessarily drive it higher)

 

[pixel]

Now, i obviously know what this is referring to, however!

I just never know what to expect (wow.. gee sums up my whole experience with the stock market ).

now i'm sure that there are no hard and fast rule about how substantial holdings changes affects share price but I just wanted to pick your brains about what you've noticed in the past?

I've seen these announcements a bit, and sometimes they make the sp skip up, sometimes nothing happens....

so in the same way that during dividend payout time the sp goes down by the amount paid out,
what tends to happen when there are changes in substantial holdings, up or down?

thanks in advance =)

G'Day Chaosi;
Simple answer: "It depends..."

If a director acquires more shares, that is usually taken as a good sign of the boss standing behind his company.
If a director sells, ... well, you fill in the blanks.

If it's a major cornerstone investor - say a Bank, Fund Management team, or the likes - then matters are similar: positive if they buy, ominous if they sell. However, there are again a few caveats to look out for: sometimes a Fundie has to rebalance a portfolio and selling is simply a by-product; or they transfer a parcel to another fund.

Sorry, there's no hard-and-fast rule for these things. That's why I find it best to sit back, keep an open mind, and watch how the Market reacts. And that can be very easily read by looking at a chart.

 

[burglar]

If a director sells, ... well, you fill in the blanks. ...

Chaosi !!

Directors sometimes sell shares in order to eat.
sometimes.