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The claim that large instutional buyers don't buy until $5
Posted on 9/21/09 at 10:36 pm
Posted on 9/21/09 at 10:36 pm
I've always read that large institutional buyers won't start picking up shares of a stock until it is at least over $5. How true is this and have you ever seen this "effect" play out ? TIA
2
Posted on 9/21/09 at 11:19 pm to Zilla
pure b.s., how does a stock actually become a stock on buyer/sellers market....... 
Just an example: Bill Gates has billions in penny stocks and low risk, high potential new wave products.
Just an example: Bill Gates has billions in penny stocks and low risk, high potential new wave products.
Posted on 9/22/09 at 12:14 am to LSUownsSEC
I think it has some truth to it... some funds don't consider stocks which fall outside of certian figures.
Posted on 9/22/09 at 8:04 am to LSUownsSEC
quote:
The claim that large instutional buyers don't buy until $5
quote:
Bill Gates has billions in penny stocks
Bill Gates is not an institutional investor. Back to Z's question, I've heard that said also but I have no proof one way or the other.
Posted on 9/22/09 at 8:31 am to LSURussian
Bill Gates is not an institutional investor. _________________________________________________
Opinions are like assholes. Everyone has one and they all stink
Posted on 9/22/09 at 8:41 am to LSUownsSEC
I believe it is also a myth. I think main factor is does it fit in the scope of the instutions buying means and what risk level they are looking for
Posted on 9/22/09 at 8:47 am to LSUownsSEC
That is not an opinion. It is a fact.
Posted on 9/22/09 at 8:47 am to Zilla
I don't know of a lot of institutions that buy individual stocks.
Posted on 9/22/09 at 9:07 am to coolpapaboze
quote:
I don't know of a lot of institutions that buy individual stocks.
Mutual funds do, they are "institutions" in investment-speak.
In my experience there wasn't really a hard and fast floor like $5 but there was generally a trend toward staying away from such stocks.
The reason I always heard was fear of investor lawsuits if the investment went sour - any competent attorney can convince a jury that the fund manager should have known better than to invest in such "obviously speculative" stocks. This argument is harder to make if the stock was $40/share.
Posted on 9/22/09 at 9:26 am to foshizzle
quote:Ah, gotcha, I'd never thought of mutual funds as institutions. I was thinking pensions, foundations and endowments, which is what I used to work with.
Mutual funds do, they are "institutions" in investment-speak.
Posted on 9/22/09 at 10:02 am to coolpapaboze
quote:
I was thinking pensions, foundations and endowments, which is what I used to work with.
Which would perhaps make Gates an institutional investor. He has both a family office and a foundation.
Posted on 9/22/09 at 10:11 am to Tiger JJ
If Bill Gates is actively managing his own foundation, he is going to owe a ton of back taxes on it....
Posted on 9/22/09 at 11:54 am to LSURussian
quote:
If Bill Gates is actively managing his own foundation, he is going to owe a ton of back taxes on it
Dunno for certain of course, he didn't consult me when he set it up. But I'd bet he gave the money to the foundation as a separate legal entity, so no back taxes.
Posted on 9/22/09 at 12:07 pm to foshizzle
My point is if a person makes a charitable contribution and then manages the money himself, the IRS can deny the deduction of the contribution. It has to be arm's length management. He can be on the board, etc., but he can't call the investment shots himself. At least that is what someone at the Baton Rouge Foundation told me once when I wanted to make a donation and then direct how the money was to be used. No dice.
Posted on 9/22/09 at 2:59 pm to LSURussian
quote:
My point is if a person makes a charitable contribution and then manages the money himself, the IRS can deny the deduction of the contribution. It has to be arm's length management. He can be on the board, etc., but he can't call the investment shots himself.
Ah. Well, like I said I don't know how he set it up, but we can be sure he found the best tax lawyer in the business to arrange things.
Posted on 9/22/09 at 3:45 pm to foshizzle
quote:
but we can be sure he found the best tax lawyer in the business to arrange things.
Naturally, being the big government liberal who advocates rapacious inheritance taxes that he is, he was determined to be as hypocritical as possible.
Posted on 9/22/09 at 4:16 pm to Tiger JJ
Most money managers look for and require stocks that are listed on the major stock exchanges so they can get the best price. When a stock gets below 5 and stays there for a long time the exchange could potentially delist it.
Posted on 9/22/09 at 10:03 pm to LSUBanker
quote:
Most money managers look for and require stocks that are listed on the major stock exchanges so they can get the best price. When a stock gets below 5 and stays there for a long time the exchange could potentially delist it.
This is true as well. It would kinda suck to have a long position on a stock that is suddenly delisted.
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