The Collapse of Adani's House of Cards - The Hindenburg Effect - Page 3

Originally posted by: vijay

Well I do not have specific on how much money he inherited and it was not even 0.01% of his net worth.

Do share more on what you mean by caste privilege in today's world unless someone is SC/ST/OBC where you have quota benefit.

I have no idea whether he owns coal mines or not, but even if he does, how is it wrong? Major production of Electricity is achieved through coal a thermal power plant which is around 75% of the total power generation.

Clearly, I cannot argue with someone who asked me to substantiate my claims with articles and did not proceed to read them.

Owning coal mines is wrong because it destroys the environment, and the indigenous population of Australia has been protesting the acquistion since nearly a decade. Read the UN's Paris Agreement. If he's such an 'ethical' billionaire, he'd invest in solar or thermal energy for which India has ample raw material as well as market. This is literally 6th standard geography.

Whatever he inherited from his father invalidates your point that he made all his money on his own and did not "inherit it."

Whether the capital he inherited is 0.1 % of his net worth from his father or even 0.0001% — that's still a principal capital which an average agricultural tenent will not get from organised or unorganised sector without entering into a situation of debt bondage.

I realise that it's useless to talk about historical exploitation of Dalits or caste based credit systems in India to someone who thinks that "quota" is a "privilege'

Nevertheless here's the "quota privilege" working in real time :

https://www.aljazeera.com/news/2022/9/27/india-teacher-allegedly-kills-dalit-student-over-spelling-mistake

https://www.ndtv.com/india-news/class-2-dalit-student-suffers-injury-after-being-beaten-by-teacher-in-up-cops-3322345

https://www.hindustantimes.com/cities/jaipur-news/rajasthan-dalit-student-beaten-to-death-for-touching-water-pot-of-upper-caste-101660451656553.html

https://m.timesofindia.com/city/allahabad/dalit-student-dies-after-being-attacked-with-bricks-rods/articleshow/62878181.cms

https://www.bbc.com/news/world-asia-india-48265387

(No wonder criminalised caste slurs are not censored on this platform when simple explanatory terms like "slùtshaming" are censored. While, mind you, sexist comments are not).

P.S. Capitalism 101 from 6th Standard Economics book : free market and monopolies are antithetical to each other. :)

Originally posted by: Deltablues

Clearly, I cannot argue with someone who asked me to substantiate my claims with articles and did not proceed to read them.

Owning coal mines is wrong because it destroys the environment, and the indigenous population of Australia has been protesting the acquistion since nearly a decade. Read the UN's Paris Agreement. If he's such an 'ethical' billionaire, he'd invest in solar or thermal energy for which India has ample raw material as well as market. This is literally 6th standard geography.

Whatever he inherited from his father invalidates your point that he made all his money on his own and did not "inherit it."

Whether the capital he inherited is 0.1 % of his net worth from his father or even 0.0001% — that's still a principal capital which an average agricultural tenent will not get from organised or unorganised sector without entering into a situation of debt bondage.

I realise that it's useless to talk about historical exploitation of Dalits or caste based credit systems in India to someone who thinks that "quota" is a "privilege'

Nevertheless here's the "quota privilege" working in real time :

https://www.aljazeera.com/news/2022/9/27/india-teacher-allegedly-kills-dalit-student-over-spelling-mistake

https://www.ndtv.com/india-news/class-2-dalit-student-suffers-injury-after-being-beaten-by-teacher-in-up-cops-3322345

https://www.hindustantimes.com/cities/jaipur-news/rajasthan-dalit-student-beaten-to-death-for-touching-water-pot-of-upper-caste-101660451656553.html

https://m.timesofindia.com/city/allahabad/dalit-student-dies-after-being-attacked-with-bricks-rods/articleshow/62878181.cms

https://www.bbc.com/news/world-asia-india-48265387

(No wonder criminalised caste slurs are not censored on this platform when simple explanatory terms like "slùtshaming" are censored. While, mind you, sexist comments are not).

P.S. Capitalism 101 from 6th Standard Economics book : free market and monopolies are antithetical to each other. :)

Well when I say share link, it makes easier for people to follow and makes the discussion thread better.

Regarding Coal the point was simply that in India whether we like it or not, we are dependent on that even though we know it’s not the best for environment. So I won’t be against someone cause someone owns a coal mine or is in that business. Most of such businesses are government regulated or price controlled businesses.

Not much idea about how his business is in Australia, if there is something wrong the Australian government will take action or for that matter anywhere.

Regarding caste thing, it was a counter to your claim that being from a certain caste is a privilege for Adani. I don’t know his caste and just know he is a Gujrati. And nothing against quota system, however I feel slowly and gradually, government should tweak reservations / quota more for lower income people who needs the most, irrespective of their caste / religion and encourage meritocracy instead of certain vote bank.

I don’t know where did I suggest that I am promoting monopolies or I am against free market. I am sure in most countries there are laws in place to restrict monopolies, ensuring that one business cannot control a market and use that control to exploit its users.

I have not much idea about The Hindenburg Effect and all.

But it was obvious he will fall.

With the speed he went up was a phase and will fall.

My dad was saying that becoming the richest is not news or a big thing, it will go down as soon as it went up.

Stock market investment are based on company's performance, not on owner's caste. Investors want returns. Lot of hard work is involved. Main challenge is to survive& come out of it. Coming days will give clear indication about future of his companies.

Originally posted by: mnx12

Stock market investment are based on company's performance, not on owner's caste. Investors want returns. Lot of hard work is involved. Main challenge is to survive& come out of it. Coming days will give clear indication about future of his companies.

This is probably not quite directly related to the OP's topic, but how many listed Indian companies owned/promoted by LC's can you name?

The answer probably tells a story in itself.

Caste privilege matters a fair bit- right from getting potential distributorships to making the right connections and a lot more.

And I say this as a UC.

Caste mention was in a previous comment which was not at all related to open topic. This comment was for not diverting main issue on unrelated matter.

So please avoid diverting main issue to unrelated pts.

Huge amount of money is involved. We are trying to understand repercussions here. Nothing else.

Refrain from bringing lc, uc here.

Originally posted by: vijay

...

It's crucial for companies and countries to respond to such reports in a transparent and responsible manner, addressing any genuine concerns and providing a clear explanation of their financial situation. This can help mitigate the impact of negative reports on credibility and restore confidence in the market.

In conclusion, while reports from short-selling companies can have an impact on credibility, it's important to approach them with a critical eye and consider the motivations and credibility of the source.

Transparence didn't happen and won't happen, not with Adani and those having had their share of profit, for years.

I'm just sorry for the Indian economy and the impact on people.

There is a German saying which doesn't exist in the English language (but maybe in Hindi): The pitcher goes to the well until it breaks.

Originally posted by: mnx12

Caste mention was in a previous comment which was not at all related to open topic. This comment was for not diverting main issue on unrelated matter.

So please avoid diverting main issue to unrelated pts.

Huge amount of money is involved. We are trying to understand repercussions here. Nothing else.

Refrain from bringing lc, uc here.

I did add the disclaimer that it wasn't quite directly related, but because it had been mentioned, I couldn't help but put a small comment regarding it.

As UC's, it would be naive and ignorant to say caste doesn't play a role for $ $ $ creation, when evidence very strongly seems to point towards it.

As mentioned earlier, the answer to the question about which listed companies have a LC promoter/owner 75 years after independence is a pretty telling one in itself.

My purpose is not to bring caste into it, but simply to educate and make folks aware of their privilege.

Even though the discussion occasionally veers off subject, it is still incredibly educational for all of us to hear the various viewpoints from the many knowledgeable people here.

In any Stock Market in the world, short selling is a lawful norm. Every day, this happens. There is always a tussle between the Bears and Bulls.

If there are results announcements for a particular stock, the news prior to that announcement will instigate the bulls and bears to jump in to betting, short selling, margin trading and fresh equity investment or exiting.

It happened many times in the past. A few brokers tried to eliminate a few companies by this short selling strategy. A few companies perished because of this. But a few companies survived from the intimidating Bears' attack and survived and flourished further!!!

Here is an interesting story ------

Today, Reliance is India's most powerful corporation. However, not long ago, it faced a crisis that threatened to bring it down. This battle determined the future of India Inc. and acted as a warning to all other companies to not mess with Reliance.

The story begins in 1982. Reliance was due a Rights Issuance of partially converted debentures. Companies employ partially converted debentures to raise funds.

A corporation borrows money from an investor and pays interest for a set period of time before having to repay the remainder of the amount in the form of company shares at current market value. The payday for Reliance's investors was coming up, and Dhirubhai Ambani naturally wanted the price to remain as high as possible, as he wanted to settle his debts without having to give up too much equity.

Meanwhile, a group of influential brokers who made a killing by shorting stocks!! They were thus named "the Bear Cartel". And they targeted Reliance as their prey. They aimed to pull down Reliance's share price by short selling Reliance's shares en masse. Once the price falls, they wanted to buy the shares at the lower price to return them to the lender and pocket the difference.

The Bears began short-selling Reliance's shares. On the other hand, Ambani had a group of brokers as friends, the group was literally called "friends of Reliance" who began buying every Reliance share being sold to counteract the Bears' selling!! But the Bears persisted, based on a simple rationale: Reliance would eventually run out of cash and would have to cease buying shares!!!

On March 18th, 1982, the Bears' sales dropped the price of Reliance's share from ₹131 to ₹121 in a single day. In those days, it was a biggest drop of a share price on a single day. But the friends of Reliance continued buying and prevented the price from crashing.

The Bears now had an endgame in mind. The BSE in those days ran on the Badla system. The share transactions had to be settled on every second Friday. Although Reliance's allies had managed to stabilize its share price by buying the shares, the Bears presumed that they wouldn't have the money to pay up and take possession of the shares on that day itself. They would then be forced to pay andha badla, essentially a charge for every share, and the transactions would be carried forward to the next settlement day. This would get the Bears a neat amount through the badla at Ambani's expense.

However, when the day of the settlement came, Ambani turned the tables!!!

Reliance's allies somehow got the money and demanded physical delivery of the shares they had bought. As explained before, the members of the Bear Cartel were short selling and didn't actually have the shares with them. This forced them to buy the shares, but they were unable to execute such a large transaction on that one day. The friends of Reliance now set an andha badla amount at ₹25/ share and asked the Bears to pay up! The Bears refused, and the ensuing crisis shut the BSE down for three days.

But, please note, every move was played by DB according to the law/ rules of the stock market.

The Bears ultimately ended up buying the shares to deliver them to the friends of Reliance. And in this frantic rush to buy the shares and avoid paying the badla of ₹25/share, they pushed the price of Reliance's share to a then all-time high of ₹201! The badla was finally brought down to ₹2/share, and the Bear Cartel had to buy the shares at a premium from Ambani and his allies, ensuring that Ambani and his friends made a tidy sum of money.

Ambani eventually got the better of the Bear Cartel, but how did the friends of Reliance have the money to pay up and seek physical delivery of the shares? The answer was cleared up by the then Finance Minister Pranab Mukherjee himself on the floor of the Parliament!!

Mukherjee revealed that unnamed NRIs had invested ₹220 million in Reliance in the period between 1982 and 1983.

In this way, he rescued his company, Rilliance, by using pure genius to outwit the short sellers.

However, in the Adani case, according to available reports, the company involved in the short selling, which implies insider trading, a prohibited practice under stock market regulations.