Of course, those people may have used other derivatives to lay some of their risk off on who-knows-who-else. There has been a lot of speculation about who is on the hook for those options. The result could be tens of billions of euros in profits without the headache of owning shares that no one else wants to buy.
Instead, it merely has to accept the cash difference between the market price and the price it has agreed to pay. Owning more shares than there were outstanding, he offered to let the council members cover their short positions with only small losses if they reinstated the license. Vanderbilt bought shares and kept the price from falling.
VW STOCK SQUEEZE LICENSE
They had tried to profit by shorting a railroad company that Vanderbilt controlled, and then revoking the company's principal asset: a license to operate a street railway.
Cornelius Vanderbilt once pulled one off, with members of the New York City Council as the victims. The corner was successful, but the man who executed it eventually went broke.īut there have been successful corners. In the 1920s, the most famous corner in the United States was in stock in Piggly Wiggly, a grocery store chain. If the group that executed the corner used borrowed money, it may be in big trouble. The stock is delisted from the stock exchange, since, without enough public shareholders, there is no ready market for the stock. But they end up owning a company for which they paid too much. Those who execute corners usually make lots of money from the short-sellers. But another is that almost everybody involved tends to lose in the end, with the exception of lucky investors who happened to own the stock before the fun started and can sell into the big run-up in prices. One reason you don't see many corners these days is that they are illegal in most countries.
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