How can this be legal to do? $NVDA

Submitted by SupraTrbo t3_11enu76 in wallstreetbets

I will start this off by saying I'm short $NVDA so the mixed shelf actually helps my position. But isn't the SEC allowing them to do a 10 billion mixed shelf setting a really bad precedence. What's to stop a CEO/CFO that gets stock options in the future from announcing a 15 billion buyback since buybacks don't have a time frame it doesn't matter how long it takes them to complete it say this in itself causes the stock to pump 20%. Then they start to do a very small portion of the buyback say 3 billion over 2 quarters which at an average of 150 per share is around 20 million shares and reporting those buybacks along with pumping causes another 25% raise you're now up 45% in 180 days. After those 180 day and being up 45% you do a mixed shelf for say 10 billion and with the increased priced you selling at an average of 200 now increasing the shares buy 50 million. So from the start you now have increased the outstanding shares by 30 million with raising 6 billion in capital. Well this announcement and selling the shares will cause the price to fall say 15% to around $180. Now with the price falling and still having to buy back 12 billion worth you wait for the next quarter to start buying back again slowly so you don't trigger the price to increase and buy back 1 billion at and average of 166 taking back 6 million shares. Total increase is now 24 million shares. Say your price falls all the way back to years low at $100 and you do a very large buyback that quarter of $6 billion at an average of around $115 buying back 52 million shares. Now you've decreased your share count by 28 million shares from the start and it hasn't cost you a dime because everything was from the mixed shelf. Now you only have to buyback 5 billion from the original announcement. Well while all of this was going on you have been getting stock options so say you owned 8% of the company from the start with buying the shares back it's now increased your position to 10% without having to risk anything on your part. Isn't this just as bad as someone pumping a stock to just dump it on other people? It's basically a very large pump and dump. This is all especially since all the insider selling the last month going on. This sounds to me like it's just a lawsuit waiting to happen. Next thing you know is they are going to let the price drop so everyone who sold shares can buy them back for cheaper just to turn around and cancel the mixed shelf.

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Few_Dig7979 t1_jaf3bbs wrote

The Enter key is your friend

103

stanthemank t1_jaf3w5s wrote

The SEC doesn’t give a shit, and even if they do, they’re so understaffed that they are basically paralyzed to do anything of consequence. These corporations know what they can get away with, hell, they hire ex-SEC staff to their payroll or to their legal teams.

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Rhino4788 t1_jaf3y2i wrote

How can your writing having 0 paragraphs be legal?

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fuckoffgetmoney t1_jaf31fz wrote

Thanks for including TLDR. That was too much word for me. To answer your question, I don't care. I don't think more than one week ahead, ever.

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Dothemath2 t1_jaf3gte wrote

Truly you have a dizzying intellect.

I have puts too so… 😬

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FuzzyaPa t1_jaf2yu3 wrote

Pump and dump them self all the way home

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VisualMod t1_jaf2gj5 wrote

>The SEC may be allowing Nvidia to do a 10 billion mixed shelf, but that does not mean it is setting a precedent for other companies. This is because each company's situation is unique, and the SEC would likely only allow such a move if it believed that it was in the best interests of shareholders. Additionally, even if the SEC did set a precedent with Nvidia, there is no guarantee that other companies would follow suit. Each company must make its own decisions about what actions are in its best interests, and many factors would need to be considered before deciding whether or not to pursue a similar strategy.

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VisualMod t1_jaf2fxr wrote

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>TL;DR: The SEC is allowing NVDA to do a 10 billion mixed shelf, which sets a bad precedent for other companies. This could allow CEOs and CFOs to pump up the stock price, sell their shares, and then buy them back at a lower price, essentially allowing them to profit while increasing the number of outstanding shares.
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