About a week ago, there were rumors that Samsung was interested to buy out BlackBerry. However, when asked about this rumour, both companies have denied it. This rumour, however, has resulted BlackBerry’s stock price to shoot up. This side-effect is now being investigated from both U.S. regulators as well as Canadian regulators. Why, you might ask?
It seems that someone may have made some money trading activities due to this rumor, and maybe that someone even started the rumor to gain personal advantages through the trade. The Securities and Exchange Commission (SEC) is now investigating this matter, according to Wall Street Journal.
As Wall Street Journal and Reuters have reported, BlackBerry’s stocks shot up to 30% of increase as a result of the rumor, and then fell as rapidly as it shot up when both firms denied the allegations.
The alleged trade, according to Reuters, was made on January 14th on 12:06 p.m. – of when the rumor started. The rumor stated that “Samsung was pursuing a takeover of BlackBerry for as much as $7.5 billion (MYR26 billion), according to people familiar with the matter”. A trader was reported to buy 200,000 BlackBerry shares at the price of $10 (MYR35.68) per share, with options priced at $0.10 (MYR 0.36) a share. This is a $20,000 (MYR 71,367.40) investment made by the trader.
Hours after the rumour hit the market whereby Samsung was said to be interested in buying $15.49 (MYR55.27) per share, the price of BlackBerry stocks reached $12.60 (MYR 44.96) that day. How is this a big deal, you ask? If the said trader was able to sell his or her shares, this results in $490,000 (MYR 1.7 million) of profit! Thus, SEC is now investigating on what really happened that day.
If found guilty, the trader will face criminal charges for market manipulation. Follow us for more updates on this as we will keep you posted regarding this issue!