Originally Posted by
Balance
Exactly, skid.
But let's use a few real life examples :
Example 1 : an investor hears from one of his customers that xyz company is not paying its bills and is asking for extended credit. He bails out of the shares and a week later, xyz co goes belly up. Is that insider information and insider trading?
Example 2 : an investor went to an IPO presentation and learns that the IPO company is going to launch a new product which will sell for 1/3rd of xyz's product and is just as good, if not better. He bails out of his xyz shares and a month later, xyz shares drop by 75%. Is that insider information and insider trading?
Example 3 : an investor visits xyz company's warehouse while collecting some goods and the manager tells him that 'business is really slow' and 'the company is having to lay a lot of staff off'. Investor sold out of xzy shares and a month later, the company announced an earnings downgrade. The sp drops by 50%. Insider information?