How are the share prices determined
How exactly is the share price determined?
Suppose you own a lot of shares (in the millions) of a large blue chip, which has been developing very well over a long period of time (and of which you know that it will continue to do well). Let's take Amazon as an example.
You sit down at a table with large institutions (which also own a large number of Amazon shares) and have the following plan:
We already know today (1.4), through insider knowledge, that the Amazon CEO on April 15. will not announce any positive quarterly figures. Nevertheless, the decision is made to jointly continue to buy a large number of shares bit by bit until then, thus allowing the price to rise artificially and thus allowing many other market participants to jump on the trend, who also buy nicely. Everyone is happy.
On April 15th, immediately after the quarterly figures were announced, they jointly sell an extremely high number of shares every second, and the price drops from 1000 euros to 900. This leads to panic selling, stop-loss barriers are broken, etc. Everyone assumes that it is due to the poor quarterly figures. So there is a chain reaction and an immense wave of sales.
A few hours later, after everything has calmed down again, you buy Amazon shares like crazy again at 900 euros and thus let the price soar again.
So you sold at 1000, bought again at 900, making a whopping profit of over 100 euros per share (yes, I know, is now calculated very easily)
But, theoretically, would something like this work (if you had a considerable number of shares) and is something like this actually done? In principle it is a relatively simple trick to manipulate the market and to get money (from the Big Boys' point of view).
What's wrong with my theory?
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