Search for a Term:

What is Daisy Chaining?

Definition of Daisy Chaining

Daisy Chaining is the act of illegally manipulating the value of a stock by a group of investors creating the impression that a stock is the subject of much greater investor interest than is actually the case.The group will achieve this by conducting multiple virtually simultaneous buy and sell deals between themselves, so boosting reported trading volumes to a degree that attracts other investors who are not in on the scam. The goal is to attract interest in the stock form a wider pool of investors, in order to push up the price of the stock, whereupon those in the scamming group can either sell their shares for much greater profits. The practice can also be used by key people in a firm itself in order, for example, to protect the company from a takeover bid (ramping up the share price may cause a potentialacquirer firm to back away from a bid, as the price will be higher than it wishes to pay), or alternatively may be used in reverse by a company seeking to acquire another firm, with part of the acquisition price being met by shares in the acquiring company. It may also be used by a firm to artificially boost the value of a firm in order to make it a better proposition to banks from which it may be seeking to borrow money. However, daisy chaining is much more difficult to achieve with stocks with large volumes, due to each trade having very little influence over relative value, so stocks with low liquidity are usually targeted for this illegal practice.
Do you have a question that has not yet been answered? Let us know.
Tel: 0207 0700 961 or Email: support@advfn.com

FTSE 100 Index

FTSE 100 Index intraday chart

Gulf Keystone

Gulf Keystone Chart
 GKP Chart  GKP Chat
 GKP Share Price  GKP Level 2
 GKP Info  Free ADVFN account

Top Investment Questions

Your Recent History
LSE
GKP
Gulf Keyst..
LSE
QPP
Quindell
FTSE
UKX
FTSE 100
LSE
IOF
Iofina
FX
GBPUSD
UK Sterlin..
Stocks you've viewed will appear in this box, letting you easily return to quotes you've seen previously.

Register now to create your own custom streaming stock watchlist.

By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions

P:40 V:us D:20171123 14:53:57