Volkswagen: The Most Valuable Company in the World
Because of a freak event, shares of Volkswagen have spiked, giving it a market value of $370 billion, surpassing that of Exxon Mobil, at $343 billion.
On Sunday, Porsche unexpectedly disclosed that it had raised its stake in Volkswagen to 74.1 percent from 35 percent, through the use of derivatives.
At a time when much of the world is looking at the markets for signs of whether we can weather a financial crisis, an episode like this makes the volatility in stocks look like slapstick comedy. It is baffling how something so basic as a major shareholder doubling its stake could cause so much turmoil in a market. Yet somehow the acquisition came as a complete surprise. Where was the transparency here?
The price spike resulted from a squeeze. A number of hedge funds had shorted VW shares, betting that the company, like other automakers, would fall in the market as consumers cut back spending. In short sales, investors borrow shares and sell them, betting that the stock price will fall and that they can buy them back at a lower price and profit from the difference.
But the move by Porsche meant that there were very few shares of VW available. The German state of Lower Saxony, where Volkswagen is based, owns 20 percent. That means only about 5 percent of VW shares were on the market.
That scarcity drove up the stock price of Volkswagen. Its shares surged 150 percent on Monday and 93 percent today as hedge funds scrambled to buy shares and cover their positions.
“Each and any short-seller in the world is trying to close up their position, and there is no way they can do it except for trying to buy like mad,” Heino Ruland, an analyst with FrankfurtFinanz, told Reuters. “Someone is selling it at a rather interesting and rich price: It is about 10 times as much as it should trade.”
The VW squeeze play may well generate sympathy for short-sellers after months of vilification from politicians and executives who should know better. Shorts have been accused of manipulating stock prices through secretive means. Now they have been the victims of similar force.
“I have hedge fund managers literally in tears on the phone,” one London-based auto analyst told the Financial Times.
Soruce: Portfolio
Expert Stock Picks
Many Newbie Survivors understand about stocks and the stock market but don’t have any idea of how to find stocks to trade.
As one Survivor, brainiac, wrote on her Blog:
I signed up for the “fantasy stock market” and perused the pages of Google finance. And I have no idea what to do with all of that information! There’s a big search window to “get quotes,” but what am I getting quotes for? I understand the idea of buying and selling shares, but that represents the entire body of my knowledge on the subject. How do I figure out what companies I want quotes for?
So, we have Starter Stock portfolios for anyone who signs up (TIP: they are also available if you reset your portfolio).
OK, then you’ve got about 10 stocks picked by someone. But then what to do?
That’s when we came up with the idea of Expert Portfolio picks! We are going to replace the “Balanced” “Conservative” and “Agressive” starter Portfolios with Portfolios created by some real stock picking experts. One of them we hope will be Peter Navarro, who is an Economics Professor at UC-Irvine and is Harvard educated.
And those experts will then update their picks every week, so that you can get some guidance, some new stock trading ideas and start to understand why these picks are getting made.
Expect this to be on the site in about 2-4 weeks.
Revised Header Design
We’ve revised the top header for all pages and changed the color scheme a bit.
First, the “Survivor of the Day” feature is going bye-bye. While it was cool, it didn’t really say a whole lot. Now, we’re going to feature a new Survivor who is active in the community, about once a week.
Second, we’re putting the top community stock picks, and the best trade from yesterday in the top header.
Lastly, we’re emphasized how many people have actually won a lot of money on the site! In a little over a year, we’ve given away over $152,000 to 441 winners. We might as well emphasize that we do PAY OUT and we’re not a scam.
Here’s how the new top header will look throughout the site, around August 1st:
New Research Pages
In our effort to provide Survivors with research tools on par with Yahoo! Finance, Google Finance or any other web site, we have added three new Research pages:
Financials show valuable stats like Price/Book, Price/Earnings, Return on Equity, Profit Margin and many others. In addition, you can see the latest Balance Sheet, Income Statement and Cash Flow for a company on a quarterly and Annual basis.
The Company News Releases are the latest happenings like earnings reports and new product announcements.
The Technical Analysis page is great to see what the technical indicators are saying to do: Buy or Sell? There are Price Indicators, Volume Indicators and Trend Indicators all providing their signals to help you, dear Survivor, make sense of the market and develop your own trading style.
New Stock Screener
Our new Stock Screener has launched and gives you the capability to find stocks that match your specific criteria.
Do you want to find a U.S. stock with a share price less than $50, a P/E ratio greater than 10 with Daily volume of at least 100,000 shares? The Stock Screener shows you stocks which fit those criteria:
| Results | ||||||||||||
| Company Name | Symbol | Exch. | Industry | Share Price ($) | PE Ratio | Latest Volume | ||||||
| AT&T INC | T | NYSE | TECHNOLOGY | 39 | 19 | 120.703 | ||||||
| BANK OF AMERICA CORP | BAC | NYSE | FINANCIAL | 33 | 14 | 117,614 | ||||||
| GENERAL ELECTRIC CO | GE | NYSE | CONGLOMERATES | 30 | 14 | 172,617 | ||||||
| HEWLETT-PACKARD CO | HPQ | NYSE | TECHNOLOGY | 46 | 15 | 110,399 | ||||||
| JPMORGAN CHASE & CO | JPM | NYSE | FINANCIAL | 42 | 12 | 113,630 | ||||||
Try our new Stock Screener now!
Video Training Seminars
We have partnered with INO TV to offer you 11 premium channels with over 500 titles of video training on trading stocks, options, bonds and futures.
All of these programs are available 24/7, 365 days a year from Wall Street Survivor inside our “Learn” section and can be watched an unlimited number of times once you become a subscriber for $99.95/year.
Subscribe now and further your development towards becoming a great trader!
