Sharing this story of a company whose stock price rose a staggering 18,025% in one year — from P0.80 in October 1998 to P145.00 in October 1999 — and its consequent crash that almost put the Philippine stock market into collapse. A classic story that I have red in various references. This article is a compilatoin of lines and quotations from several sites from the internet
Almost every trader in PSE these past days is eyeing to NOW Corporation and wants to give it a try. Today, let's give a brief discussion on BW Resources 1999 scandal - a stock that has been a subject of manipulation and controversy which left most of it's holders with massive losses.
"Although the stock market was still in a bearish trend following the 1997 financial crisis, the BW stock bucked the trend with its price continuously rising.
Within one year alone from October 1998 to October 1999, BW’s stock price jumped an astounding 18,025% — from P0.80 (US$0.0166) to P145.00 (US$3.01)"; ref: https://www.pinoymoneytalk.com/bw-resources-stock-price-manipulation/
This is short video which focuses on former President Estrada impeachment trial and the role of BW stock to this controversy; ref https://www.youtube.com/watch?v=t6fEPYPFeIA&t=55s:
The rise and fall.
"Although the stock market was still in a bearish trend following the 1997 financial crisis, the BW stock bucked the trend with its price continuously rising.
Within one year alone from October 1998 to October 1999, BW’s stock price jumped an astounding 18,025% — from P0.80 (US$0.0166) to P145.00 (US$3.01).At one point, it even became the most traded stock in the Philippine Stock Exchange, beating perennial blue chip stock TEL (Philippine Long Distance Telephone Co.)"; ref https://www.pinoymoneytalk.com/bw-resources-stock-price-manipulation/
"The Philippine Stock Exchange then stepped in and investigated the company. It uncovered several stock price manipulation strategies supposedly conducted by Tan and his cohorts."; ref https://www.pinoymoneytalk.com/bw-resources-stock-price-manipulation/
"It was also found out that the daily turnover of the BW Resources stock circulated among 10 brokerage firms only. In addition, the PSE accused BW Resources of engaging in “wash sales” or a sale transaction wherein the buyer and seller of the stock is the same."; ref https://www.pinoymoneytalk.com/bw-resources-stock-price-manipulation/
From BW to Suntrust.
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NOW Corporatin has nothing to do niether with BW and connected individuals, and of course nor with the controversy. However, the main deal here is that - we do not know how far the stock will go and when will big manipulative players give up thier position and sell.
The Trade Project suggests that traders should have a concrete entry and exit plan. Do not caught in the hype and always do your homework before taking an action. Remember, NOW is not yet a third player until it has been officially declared.
Small players has the responsibility to study the market and protect thier capital. A military strategist once said: "A war is won before it is fought". Manipulative players will leave you with massive losses before you even knew it.
*****
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