Which assertion is validated by the Borussia Dortmund case BTW - the options trader involved reported the suspicious put options the day after the bombing.
The bomber in this case (by profession, a journeyman electrician in the CHP plant of the university hospital in the city I work in) apparently
built very good bombs and radio triggers (he had taken a room in the team’s hotel with a view of the team bus’s route) but
slightly misjudged one bomb’s placement
probably was not aware that the team bus was partly amoured against the opposing team’s fans
bought part of the options using the hotel’s WLAN :smack:
to add insult to injury, had to get treatment for infected tick bites incurred when placing the bombs
The warrant or his arrest appartently was issued two days after the bombing - the remaining time he was traced and observed. So competent criminals may have had/may have more success.
You make money on private information. Once the bomb has gone off, the information is no longer private, everyone can see that a bomb has gone off. Yes there will be a dip in the stock price but that reflects a real damage to the brand of the store. There’s no fundamental reason why it would rebound to it’s original price after a few days.
If there were a reason for it to rebound, then everyone else would also expect it and buy immediately after the bomb on the expectation of a rebound and wipe out the dip (assuming a weak form of the efficient market hypothesis).
The fact of the bombings is public knowledge. The fact that the bombings are about to stop is not. Though, of course, it’s tough for even the bomber to predict how long it’ll take the public to react to the end of the bombings.
One thing I have found is a truism, is that if a circumstance presents a would-be profiteer with a mechanism to cheat their way to wealth, they will try to use that mechanism.
The idea of committing a criminal act to cause stock prices to rise or fall, has been around since before I was born. I saw it repeated dozens of times on “based on real accounts” crime drama series since I was a kid.
I thought this was worth reviving, in light of speculation that the Chipotle contamination events may have been corporate sabotage. The evidence seems thin, though, nothing more than statistical analysis of the pattern of events.
What kind of return can you expect from something like this? Say the stock tanks by 25%. Buying low and then selling when it recovers would get you a 33% return. That is a good return for an investment but unless you have a lot to invest you don’t really make much money. Even if it tanks 75% and you quadruple your money you still need a big stake to make a lot of money.
You don’t make money from buying straight shares, you make it from buying highly leveraged, out of the money options. Again, you can’t do this betting on the recovery because you’re working on the same information everyone else is. But, if on the day before the bombing, you start buying up all of the deep out of the money short options you can that expire within the next few days, to the seller, they’re practically worthless so they’ll happily sell them to you for a few pennies so they at least get something. Then, when the stock craters, you’re sitting on a giant pile of instant cash.
Of course, this is the dumb, obvious way to do insider trading so the SEC will be on your ass in an instant if you actually try and make this trade.
The “evidence” seems beyond thin and well into the range of conspiracy theory to me.
It might be different if Chipotle had salad bars* or other publicly-accessible food areas, but all their stuff is made behind the counter. The “corporate saboteurs” would have to recruit employees to somehow plant pathogens in the food (how you’d do this with norovirus is beyond me). And if the “saboteurs” were operating at the level of Chipotle food suppliers, why weren’t the outbreaks more widespread and ultimately tied to the suppliers (assuming they don’t have an exclusive deal with Chipotle which keeps them from shipping to other outlets)?
As for the so-called statistical analysis, part of which found that 60% of such outbreaks typically occur in a different time period than the Chipotle incidents: Well kiddies, that means 40% actually do occur at such times.
Color me unimpressed.
I think we can chalk Chipotle’s troubles up to bad supervision of employees and inattention to personal hygiene.
