Remember when Alliance Data Systems fell from 77 to 64 in a flash last week Thursday? The stock traded 33 million shares. Now the SEC is informally looking into the source of the "fishy" email, and it's pointing at one hedge fund in particular.
Here was the circulated email:
ADS getting pounded - hearing the board is now meeting on a revised proposal from Blackstone to acquire the company at $70/share, down from $81.50. Blackstone is negotiating a lower price due to weakness in World Financial Network - part of ADS’ Credit Services Unit, as evidence by awful master trust data this month from the WFN Holdings off-balance sheet credit vehicle.
Now we know this happens in specific stock cases, and it gets the Feds interested. How do you keep them off your back? Make outlandishly stupid bearish macro calls on the banking system, but guss it up in a report to show you have an "intellectual" basis for it.
And then when it is challenged, say how "outrageous and ridiculous" that is.